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Q.  What are the prominent changes / issues that have affected the construction industry over the last one year?

A.  An unprecedented increase in all input costs like cement, steel, labour, etc. In addition to this the prices continue to be volatile. Further the company expects that the current liquidity crunch in the market will have an adverse impact on all commercial and residential buildings which is predominantly undertaken by private developers. Non-availability of skills has also affected the construction industry.

Q.  Your views on how inflation has affected the construction industry on the whole with the prices of steel and cement amongst other increasing?

A.  The inflation has a huge negative impact on the construction industry. The steel prices in the last two years have gone up from Rs 30,000 to Rs 50,000 per ton though it has come down to Rs 45,000 per ton at this point of time. Similarly the price of cement has also increased from Rs 190 to Rs 270 per bag and continues to be volatile. Such huge variation in prices cannot be predicted and provided for by construction agencies.

Q.  Mention your participation and experience in the PPP projects undertaken by you in last two years? What are the most critical factors for success in PPP projects?

 

A: Higher inflation definitely had an impact on the purchasing power of the people and consequently which has an impact on the real estate residential market side. Further the inflation has added to the negative impact. Our experience with PPP projects has been very little. The critical factor is the completion of the project in time and estimating the future revenue.

Q: Do you think that Government initiative to increase FDI inflow in the construction sector has proved beneficial in terms of expansion?

A. No doubt the Government initiative to increase the FDI inflow in the construction sector will have a positive impact but it will take sometime for medium players like us to take advantage of this initiative.

Q. What have been the impacts of rising interest rates on the construction sector? How long do you think this will last? What counter measures has the industry taken in this context?

A. Working capital constitutes a substantial portion of the total capital requirement of a construction company. Hence, the impact of rising interest rates in the construction industry can be really adverse. The company expects this to continue at least for another six months. The only way we plan to reduce the impact of such rising interest cost is by raising some more low cost funds like ECB supported by SBLC, promoter funding, etc.

Q. Your views on the price trend. Any further softening you expect from current levels? What is the strategy adopted by your company?

A. We expect the prices to stabilise in the next 3 to 4 months. As of now the company has planned a wait and watch policy.

Q. Are there too many regulations related to construction industry in India? Do you anticipate any regulatory change in the near future?

Yes, there are too many regulations related to construction industry in India. Through various forums we have been seeking for regulatory change and we hope things will improve in the years to come.

Q. What are the major growth drivers for the construction sector in the coming years?

A. Water supply, sewerage, irrigation, roads & bridges, airports, seaports, sub-station and transmission lines.

Are you planning to expand your business outside India? Kindly brief us about the strategy?

A. Yes, we do have plans to expand our business outside India. The plan is only in the drawing board stage at this point of time. However, it will take 2-3 years to set our foot abroad.