Availability of finance to the customers will be the key to revival of CE demand.

Incentivising use of telematics by the contract award authorities will definitely help in establishing use of technology.

Vivek Hajela, General Manager and Head-CEB, Larsen & Toubro

Focus on 'roads and highways' is touted as a major key to the revival of the sagging economy.  What is your take on this?

The development of roads and highways is a major driver in the infrastructure link and it brings together a spectrum of technologies, equipment and skilled labour to revive the economy. The government of India considers road network critical to the country's development, social integration and security needs of the country. Their vision to increase construction of highways from 30 km per day to 60 km road per day can only be realized by encouraging mechanization and using the best-in-class equipment to deliver safe, serviceable and sustainable roads. Road construction will revive the demand for manpower, material and equipment. The rebooting of the road sector post lockdown will revive the sagging economy and provide substantial employment to migrant labour and activate the equipment lying idle across various projects pan India.

How do you assess the initiatives from the government / NHAI specifically to reboot the activities in the road sector?

 The government has already initiated releasing payments to the contractors for the various jobs completed. This has helped ease the situation to a considerable extent after payments are received by the contractors and wages released to workers engaged at site. The Central Government has announced 20 lakh crore economic stimulus package. Though large focus is on credit support to businesses, it will certainly aid revival. As mentioned, MoRTH has also been assuring of increasing the pace of road construction activities under various agencies like NHAI, NHIDCL and schemes like Bharatamala, Sagarmala, PMGSY, Chardham etc. Further, there is a huge National Infra Pipeline worth 100 lakh crore to be completed by 2025. Hence, we are confident that if all these projects are implemented as assured, construction equipment demand will soon rebound and start growing. Hence, implementation is the key. Quick transmission of stimulus will motivate banks and NBFCs to get more active in lending to quickly revive the construction sector.

As a service provider what are the major constraints in today's context and how these pressure points can be eased out?

More than 95% equipment are financed by banks and NBFCs, hence, availability of finance to the customers will be the key to revival of CE demand. While GoI has measures to ease credit availability, we expect financial institutions to remain cautious in lending. Transmission of lower rate of interest to the end customers does not seem to be happening. Another issue facing the industry will be availability of skilled migrant workers. The government and employers will have to work in tandem to ensure workers regain confidence and feel safe again to work at worksites.

What is the scope and potential of leveraging the edge of digital tools in the entire eco-system of road sector?

The role of telematics is increasing in all spheres of the road construction activity. Almost all models of excavators come with remote monitoring systems. Komatsu has their own patented system called Komtrax, which provides detailed analysis of performance and can be seen remotely. It also provides alerts for maintenance and faults. Similarly, L&T compactors supplied by us have the option of being fitted with intelligent compaction systems (ICS). This helps the operator know which surfaces have already achieved the required density thereby ensuring that the compaction is complete. This increases the speed to work and reduces the time required for supervising and inspecting the surfaces. ICS, though, is only a measurement system and in no way it improves the compaction quality. The quality of the compaction depends on the compactor entirely which is deployed for the operations.

Is there any scope of 'incentivising' the adoption of advanced technologies?

Telematics and other intelligent technologies are very useful to increase efficiency and productivity of equipment as well as reduce lifecycle cost. However, customers sometimes get swayed by lower price of equipment. Hence, incentivising use of telematics by the contract award authorities will definitely help in establishing use of technology.

What are the reforms that you expect for the healthy growth of the road sector?

Road sector has been continuously evolving. Agencies like NHAI have been using different methods of funding like EPC, BOT, Annuity, Hybrid Annuity etc. Land acquisition and environment clearance was identified as biggest contributor to the delay in execution. Hence, recently NHAI has modified the contract document to reduce delays due to these issues. Going forward, EPC contracts funded by the GoI will give the boost to the road sector as there is very low appetite with private developers to invest in the road projects.

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