Reviving the construction sector in India post COVID-19
The COVID-19 pandemic has brought the entire economy to almost a standstill. In the construction sector , COVID-19 pandemic has created disruptions in the regional, domestic, and overseas construction supply chain and resourcing including availability of labour, plant, machinery, materials, capitals, etc, the impacts of which are expected to be felt over the near and long term.
As the lockdown eases out in the near future, the revival of construction sector is vital for the recovery from an economic impact standpoint of COVID-19. This is also a unique, time bound opportunity for us to promptly respond and reset some of the baselines for the construction sector in India.
In reference to the ongoing pandemic, KPMG in India has released a report titled ‘Reviving the construction sector in India post COVID-19’.
Below are some key highlights from the sector that are critical for recovery of the overall economy:
Says Chintan Patel, Partner and Leader-Building, Construction and Real Estate, KPMG in India, “Over 49 million people, ie, close to 12 per cent of nation’s working population is employed by the construction sector. Hence, to expedite recovery from the economic impact of COVID, revival of the sector is vital. Given the limitations around available capital, resources and necessary health safeguards in the near future, both project owners and contractors will have to have clear strategies and respond effectively to these four critical questions – How to prioritise projects given the constraints? How to minimise the impact of COVID and make projects viable again? How to build resilience and safeguard projects from future emergencies? And last but not the least, how to minimise disruptions to the construction process from future disputes and claims?”
Reviving the construction sector in IndiaKPMG in India recommends the below next steps to help make informed decisions and manage projects effectively, post COVID-19.
1. Prioritise projects:
- Alignment of the project with the strategic intent, national priorities (eg, healthcare).
- Analyse interlinkages and dependencies on the success of other projects.
- Ability to generate immediate and sustained employment across value chain (labour, contractors, engineers, et all).
2. Re visit project definition and delivery strategy:
3. Build resilience:
A three-pronged approach can be used to address construction projects in the future:
- Use appropriate digital technologies to enable timely detection and prevention of spread of illnesses (eg. vison-based analytics, thermal imaging, digital fencing, etc).
- Undertake capacity building by setting up of independent, empowered project monitoring units to ensure timely and within budget projects.
- Digital push: Provide digital enabled environment for remote working including online project monitoring etc.
4. Strengthen contractual provisions:
- Setting out clear guidelines on facilities to be provided by contractor for workers, which need to be mandated by project owners in the contract.
- Implementation on integrated Project Delivery Framework, which is based on a joint contract between the key stakeholders within a project environment and share mutual risks and rewards, with an overall focus on successful project delivery.
- construction sector
- economic impact
- National Infrastructure Plan
- Indian construction sector
- construction activity
- Chintan Patel
- labour at site
- construction projects
- project delays
- land acquisition