Reverse migration a surprise, but now we have to find the workers job back home: ICEMA President

Murali Gopalan Mumbai | Updated on July 08, 2020

Sandeep Singh, President of the Indian Construction Equipment Manufacturers’ Association   -  Business Line

Construction gear industry in talks with Centre to kickstart road, irrigation projects

Sandeep Singh, President of the Indian Construction Equipment Manufacturers’ Association (ICEMA), believes employment opportunities can be created in the infrastructure space for migrant workers who are back home in their villages and towns.

“We have been talking to the Centre to work out a strategy for these people who have returned to their homes in Uttar Pradesh, Bihar, Orissa… why don’t we create employment opportunities over there?” he asks.

Singh, who is also Managing Director of Tata Hitachi, reiterates that this option is not difficult to implement. “There are a host of projects be it roads, irrigation or urban development (projects) like metros, low-cost housing etc,” he elaborates.

Some of these have already been identified under the Centre’s National Infrastructure Pipeline and funds allocated for the next two years.

Manpower availability

“The Centre must activate these projects. Once jobs are made available for these skilled migrant workers in their hometowns, it will generate a lot of infrastructure work,” he adds.

Singh insists that manpower availability will not be an issue across different States and kicking off work for their residents, who have migrated back home from cities, is the best bet going forward. He admits that the migrant labour movement caught “all of us by surprise” since construction equipment manufacturers assumed that contractors would be able to retain workers during the lockdown.

“However, the information we are getting is that work efficiency at sites is not more than 25-30 per cent for all construction activities,” he says. Mining, however, was not as badly hit thanks largely to public sector units like Coal India which ensured that workers were taken care of. This was not the case in other segments like housing or roadbuilding where they were not paid on time and suffered greatly.

“The fear factor caused by the Covid-19 outbreak also contributed to the exodus as everyone was keen to get back to the safety of their homes,” says Singh. The added turmoil caused by the unavailability of trains and buses has now ensured that many of them will be in no mood to return to the big cities.

According to the ICEMA President, the going has been clearly difficult for construction equipment manufacturers, a list that includes big brands like JCB, Tata Hitachi, Volvo, Larsen & Toubro and many others. Each of them had to grapple with challenges such as the NBFC liquidity crisis, for instance, which led to resistance in lending both to the construction sector and contractors.

“Despite this, the industry had just started recovering from December 2019 with January and February looking good too,” recalls Singh. The momentum was continuing into March when the national lockdown happened. Even while orders were in place for backhoe loaders excavators or compactors, everything came to an abrupt standstill.

“We supported the Centre’s move to take action at an appropriate time and prepared ourselves for tough times,” he says. While April was a washout, May was not so great either with June gradually showing some positive signs in capacity utilisation across different plants.

While the first quarter of this fiscal has been little to write home about for the construction equipment industry, the rains will come as a dampener in the second quarter. “To that extent, the first half will be very difficult overall for the entire sector,” says Singh.

Things could look up in the second part of the fiscal but, by and large, overall volumes will be half of what was registered in 2019-20. “Last year saw a decline of 25 per cent and this fiscal will see the first half drop by 40-50 per cent,” he adds.

BS-IV norms

Construction equipment manufacturers are also seeking a year’s extension from the Centre in implementing Bharat Stage IV emission norms. This was scheduled to be in place this October but clearly impossible now because of disruptions both in the supply chain and testing cycles following the lockdown.

Some components had to come from Europe, largely for engines and after-treatment, but that is clearly ruled out at this point in time. “The whole cycle has been disrupted and we have sought a deferment of six months to a year. We are carrying old stocks which need to be liquidated first,” says Singh.

Published on July 08, 2020

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