Roads & Highways Minister Nitin Gadkari exhorts equipment manufacturers to focus on cost-effectiveness and adoption of alternate fuels

“There is a huge scope for bringing innovative construction technologies, which will not only increase the pace of road construction, but also enable contractors to make more profits. Some of the key breakthroughs have been the newer soil stabilization technologies in construction of bridges and tunnels,” stated Shri Nitin Gadkari, Minister of Road Transport & Highways.

The Minister was addressing the inaugural session of the Indian Construction Industry Association (ICEMA) held in New Delhi on 12 July 2022.

Laying emphasis on use of alternate fuels, he added, “The scope of construction is immense in India, given the large road map of the government. Despite the adequate funding, the cost of construction needs to be minimised to make projects financially viable. This can be achieved by introducing innovative technologies, including alternative fuels. Use of alternate fuels like biofuel, methanol, and other bio- products will negate the impact of the spiralling crude oil prices.”

He suggested that stakeholders in the construction industry should focus strongly on research and development and gave the example of the initiative taken in the Northeast construction market where diesel and methanol were mixed in a 50:50 ratio. To make alternative fuels available on a larger scale, the government is experimenting with ethanol to derive higher calorific value at par with diesel and is also working on developing bio CNG sourced from the Indian Oil refinery plant at Panipat, Haryana.

“OEMs should consider developing machines in which their petrol engines can be converted to flex engines that can use biofuel, methanol, and other bio-products. This will not only check pollution in a big way but will also reduce the cost of operations and thereby minimise the overall cost of the projects.”

He informed that the Central Government has made a lot of headway in the pace of infrastructure building across sectors like roads and highways, expressways, airports, and ports. He pointed out that port connectivity is a top priority of the government, which is also working towards privatizing 60 coal mines. “The government wants to enable integrated infrastructure development and is encouraging stakeholders towards greater mechanisation by bringing in innovative technologies in the construction of infrastructure projects to fast track project completions.

At the annual session, construction industry stakeholders expressed optimism on the revival of equipment demand in view of the thrust given by the government on infrastructure development along with some attractive finance schemes and incentives.

Delivering the keynote address, Vivek Hajela, Governor Council Member, ICEMA & VP and Head Construction Equipment Business, L&T Construction & Mining Machinery, said, “Infrastructure development, will be powered by building roadways, high speed rail links, mining, and waterways management projects. This will support the growth of the Indian economy for the times to come. The key to catalyse growth will be the construction equipment and machinery sector. In the recent past, due to setbacks like the Covid-19 lockdowns, higher price of raw materials, and new emission regulations, equipment sales had dipped; however, on the upside, India’s OEM and vendor base, and dealer support has remained strong. The Indian CE industry is now geared up to meet upcoming demand with a higher level of mechanisation in its construction machines and can also cater to the export markets.”

Dimitrov Krishnan, President ICEMA, and MD, Volvo CE India said, “Demand of equipment in the past fiscal was moderate with an 8 percent decline in the industry. However, exports grew by 60 percent due to robust global demand. With 37 percent increase in outlay in infrastructure by Government-led plans like Gati Shakti, Master Plan, National Infrastructure Pipeline, and some structural reforms, demand for construction equipment, plants and machinery is expected to remain robust. However, the rising inflation could pose a challenge for pushing demand upward.”

Informed Dharmakriti Joshi, Chief Economist at Crisil, “The current geopolitical issues have caused disruptions in global supply chains, plus there is a higher interest rate, inflation, and a higher cost of steel and cement – all of which could slow down economic growth resulting in a scaling down of infra development and thereby equipment demand. Th Indian government’s renewed thrust on infrastructure development, reducing the number of non-performing assets (NPAs) are good indicators.”

Aditi Nayar, Chief Economist at ICRA informed, “There is a shortage of manpower supply and interest rate hikes, which are not conducive for economic growth. These issues need to be addressed by the government in a calibrated manner.”

Praveen Sethia, Founder & Director, Infrastructure Advisors, stated, “Infrastructure and industrial growth will be key to the growth of the Indian economy.”

An optimistic Vivek Hajela said, “Though there are headwinds in the industry, demand is expected to remain stable and grow further due to the robust demand fundamentals.”

In the special plenary session themed ‘Railways: Fuelling the Engines of Infrastructure Growth,’ the panellists discussed the opportunities being offered by the Indian Railways, high-speed rail network, and metro expansion. H M Gupta, Director, Infrastructure DFCCIL, in his presentation on DFC, highlighted its benefits to the environment and logistics sector, and stated that the DFC will save around 457 million tons of CO2 emission over a 30-year period.

Deepak Garg, MD, Sany India, concluded the session by adding that there are a lot of opportunities for the CE Industry in railways. “We look forward to continued investments in projects like DFC which will reduce India’s high logistics cost,” he stated.

In the 2nd panel discussion themed “Being Future Ready- Market intelligence | Technology & Innovation | Sustainability,” the panelists shared their perspectives on the emerging technologies and market trends that are shaping the future of the Indian CE industry. Chris Sleight, MD, Off-Highway Research, through a video conference, presented a global outlook on the industry for 2022-23 and beyond. According to him, high volumes will continue into 2022 throughout the world (except China) with the increased infrastructure spending. “OEMs have full order books, and sales and revenues remain high. Though component supply and shipping are still a problem, the situation will be getting better from here on,” he maintained.

Moderating the valedictory session, Deepak Shetty, Board Member – ICEMA and MD, JCB, emphasized on the need for technology adoption and a closer association between the government and the OEMs to make India a global manufacturing hub.

Amit Varadan, Joint Secretary, Ministry of Road Transport and Highways (MoRTH), informed the audience: “The Indian construction industry is the third largest in the world; but there is still a large headroom for growth. This is taking into consideration that 30 percent of the equipment demand is still met through imports. Growth could be through more localization and development of newer or upgraded equipment models by the large OEMs and components manufactures of global stature present in India. Demand is being driven by the government-led National Infrastructure Pipeline, Gati Shakti plan, the Bharat Mala for seamless movement and connectivity, and, most importantly, the surging pace of road construction by the National Highways Authority of India.”

He added, “The Indian construction equipment industry could also leverage its presence through increased exports as it follows the best manufacturing standards and practices. The government has been working closely with the CE Industry and its stakeholders to widen the scope of mechanization and improve productivity. Initiatives like the stage IV emission norms and the forthcoming Stage V emission norms will lead to the creation of more superior equipment and higher performance benchmarks.”

Dimitrov Krishnan gave the final Vote of Thanks at the ned of the annual Session of ICEMA 22.
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