Advanced mechanization, equipment and systems are expediting construction in the real estate sector, and enabling better quality work, along with timely completion of projects. Project developers, sharing their onsite construction activities with Seema Gupta, express confidence and optimism in the new developments in the CE industry in helping them comply with the RERA Act.
With the government focus on bringing transparency and accountability in the Real Estate sector, and with RERA coming into effect in several states, the onus is on the builders to meet the project timelines and ensure quality work, else face penalties. RERA will have a strong positive effect on buyer sentiments, especially those looking to invest in the residential sector. Many developers have launched integrated townships that have a mix of villas and high-rise towers, along with commercial developments, transport and connectivity systems, education institution, schools, parks, retail outlets, gymnasium, jogging tracks, indoor sports, and other amenities.
Fortunately for the builder, the construction sector is becoming more and more technologically advanced with new mechanizations, equipment and systems that are expediting construction, making it safer too, and enabling better quality work. In fact, the CE industry is abuzz with advanced products like tower cranes, mechanized scaffolding, concrete pumps, access platforms, etc. At the same time, new construction techniques like drywall, PEB and precast are being adopted for speedier completion of projects. Use of software for project design and management is also becoming essential for builders who want the best solutions for their projects.
Challenges & Solutions
A developer has to take several approvals before commencing construction of a project. Obtaining adequate approvals for high rises and environmental clearances from concerned authorities is a challenge as any delay in getting these permissions can impact the delivery time of projects. On the bright side, advancement in construction technology has provided relief for developers facing a dearth of skilled manpower. New technologies like PEB, System Formwork, Precast, and Drywalls, along with machinery like cranes and hoists, are reducing the overall construction time of projects.
Affirms Girish Shah, Director, The Wadhwa Group. "Timely completion of a project is a major factor for all real estate developers. In case of construction of residential buildings, high-rise towers, and townships, the typology of buildings plays an important role. There are various formwork technologies, machineries and equipment available in the market that simplify the construction process and ensure reduction in construction time. The construction time of typical slab casting can be reduced by using system formwork and through maximum repetition the cost of construction can also be minimized. Also, the technology of automation such as BIM has brought in a very significant change in executing and planning of the projects, which enables us to plan our work in advance and carry out hassle-free construction activities for timely completion."
Our top priority is the safety of the workers using the equipment. We also make sure that the maintenance issues are minimal; products have a good brand name in the market, and an excellent performance record. We also do take into consideration the initial cost of the order. Girish Shah, Wadhwa Group
"The foremost issue and challenge that we have to deal to avoid any delay in construction work is to take a formal sanction of a project as it is time consuming and cumbersome," says Sanjay Jain, Group Managing Director, Siddha Group. "The unexpected delay in the real estate sector occurs in mainly two phases: Phase I: prior to sanction and commencement of construction, often the delays are caused because of numbers of NOC, clearances, approvals which are required from various authorities. There should be proper time bound guidelines for the company with the agencies for fast and smooth movement of the project construction work. Post-sanction, after the commencement of construction, the major reason is the exponential growth of the sector which has acute shortage of skilled and semi-skilled manpower to meet the huge quantity of construction work. As such, the projects get delayed due to lack of adequate deployment of labour and manpower."
In the highly competitive real estate sector, if new construction technologies and increased mechanization are not adopted, it will be difficult for the builder to survive in the market Sanjay Jain, Siddha Group
Says V Gopal, Executive Director, Projects & Planning, Prestige Group, "Moving towards more mechanical and factory finished items and creating less dependency on site work and labor are factors that can help in timely completion, provided the design is also aligned accordingly. He adds, "The challenge primarily lies in assessing the adequate time required for the various activities of project development, right from first principles, and therein doing a more rigorous planning that can be monitored activity-wise rather than milestone-wise. Sequential activities need to be programmed with minimum time, and overlapping activities with parallel or multiple resources to enable timely completion. Use of software such as SAP, BIM, Primavera, etc. will find increased use for planning and monitoring. As a result, project management will become more relevant than before."
Moving towards more mechanical and factory finished items and creating less dependency on site work and labor are factors that can help in timely completion, provided the design is also aligned accordingly. V Gopal, Executive Director, Projects & Planning, Prestige Group
Referring to Alu-Form construction technology as one of the most viable and most viable currently for timely completion of projects, Kishor Pate, CMD, Amit Enterprises Housing Ltd. elaborates, "Construction technology is constantly evolving, allowing for faster completion than in previous years. New technologies like Alu-Form are major steps in this direction. This is a versatile construction technology that involves recyclable and reusable materials and results in durable and highly sustainable buildings. The wood panels customarily used in construction can be used only about 25 times before they must be scrapped. However, the aluminium panels used in Alu-Form construction have a usage cycle of as much as 200 times. The Alu-Form construction process is a major leap forward in sustainable construction and is being increasingly used by reputed developers in cities like Pune."
In the foreseeable future, it is unlikely that many developers will announce the launch of large-scale townships. The best strategy in the post-RERA era is to focus on registering and completing existing under-construction projects. Developers with large-scale townships will have to take development partners on board Kishor Pate, Amit Enterprises Housing"Modular housing is yet another method that can be adopted by progressive Indian developers. When supported by the correct design, factory-build modular housing conforms to most standards of structural integrity, safety and environmental impact. This kind of construction involves the use of pre-manufactured components like roof and floor trusses that can be assembled quickly and with major savings on construction time and labour costs," he adds.
However, it must be noted here that the use of such innovative construction technologies requires a consummate upgrading of the skills of construction artisans at the grassroot level so that they can understand the entire concept. Using alternate construction techniques without proper knowledge and instruction can result in compromised construction integrity, safety and project lifespan.
New Construction Practices
With competition on the rise, developers are adopting the latest construction technologies and techniques that will bring quality and timely completion of their projects. As Sanjay Jain of Siddha Group says, "In recent times, the real estate sector has gradually evolved with innovations in construction for better quality, driven by the higher aspirations of the buyers who are now well travelled and exposed to international standards of living. In such a competitive sector, if new construction technologies and increased mechanization are not adopted, then it will be difficult for the builder to survive."
Siddha Group has started to use construction technologies such as PEB, Precast, Drywall, etc in its projects to ensure better output. Informs Jain, "As all the projects are high-rise, with repetitive buildings, we have recently adopted aluminium formwork shuttering; the entire structure is being made as a monolithic, totally removing the use of brickwork and plaster, which was a major time consuming activity. By using the aluminium formwork shuttering we are getting accurate dimensions and sizes as per the plans, which enhance the quality of work. In addition, we are using modern-day equipment like painting by machines, construction machineries for earth excavation, shifting of materials, etc. Needless to say, setting up of a batching plant is a minimum pre-requisite for any project of the standard volume."
He informs that in addition to having their own captive fabrication plant for manufacturing, they have bought a number of formwork systems for use in the near future. "However, keeping in mind the number of projects in hand, we should ideally be buying more formwork systems as well as new equipment such as batching plants, excavators, pay loaders, tower cranes, passenger hoists, builders’ hoists etc."
Capacit’e is using different types of system formwork owned by it, including, automatic climb form, aluminium form, table form, composite panel (consisting of vertical panel and horizontal panel formwork systems) to meet the varying construction needs of different types of buildings. Specialised formwork technologies include vertical composite panel system for columns, horizontal composite panel system for slabs, crane enabled composite table formwork, aluminium panel formwork and automatic climbing system formwork.
"Each kind of building requires a high degree of skill, scale and speed to complete. We believe that implementing technology available with us in construction of buildings allows us to complete projects on time. These modern formwork technologies reduce the construction cycle time of replicating floors in a high-rise construction as compared to conventional formwork systems such as cup-lock formwork," says Rohit Katyal, Executive Chairman & CFO, Capacit’e Infraprojects.
We are using modern technologies like temperature-controlled concrete for mass pours, self-compacting free flow concrete for heavily reinforced pours, and special concrete for vertical pumping in super high-rise and high-rise buildings Rohit Katyal, Capacit’e Infraprojects"We have the capabilities to undertake building construction projects using modern technologies including temperature-controlled concrete for mass pours, self-compacting free flow concrete for heavily reinforced pours and special concrete for vertical pumping in super high rise buildings and high rise buildings," he adds.
Some of the ongoing projects of the company are Lodha - Altamount Road, Bhendi Bazaar redevelopment, Lodha - The Park (Worli), Trump Towers, and Godrej projects in Dwarka and in Central Chembur. Capabilities include constructing concrete building structures as well as composite steel structures, and it also provides mechanical, electrical and plumbing (MEP) and finishing works. As on January 31, 2017, projects in the West Zone, North Zone and South Zone constituted approximately 60.78%, 15.69% and 23.53% of their total projects, respectively.
"We regularly purchase capital assets for undertaking our business. The quantum and the nature of capital assets purchased depends upon a variety of factors, including our order book, the nature and the location of projects being undertaken by us, and our existing utilisation of such assets," informs Rahul Katyal, co-Promoter, Capacit’e Infraprojects.
To offer the highest level of quality to its customers, The Wadhwa Group’s approach to and for each project of all configurations, is to incorporate system formwork, machinery, AAC blocks, chemical mortars, chemical and membrane waterproofing methods, adhesives, etc. "Construction of projects requires the purchase of new equipment or formwork systems. We make need-based investments depending on our requirements. We analyze and plan all our provisions for our future projects before making a final decision," says Girish Shah.
Kishore Pate informs that Amit Enterprises Housing Ltd was an early adopter of the revolutionary Alu-Form construction process. This extremely progressive technology is a highly innovative method of building that allows for the speedy, accurate and highly consistent casting of all internal and external walls, columns, beams, floor slabs, stairs and other parts of a concrete building. It is an integrated system which merges the wall and slab panels into a seamless unit. With a drastic reduction of form-jointed sections, the end-products have superior resilience to wear, tear and degradation.
Using the building’s architectural blueprint as a guideline, highly resilient aluminium panels are pre-designed for all concrete elements of the building’s superstructure. Alu-Form technology allows internal electrical fittings and plumbing to be incorporated with a high degree of design efficiency, and as part of the overall building plan. This factor reduces the probability of electrical and plumbing failures. On the rare occasions when they do occur, such problems can be quickly isolated and fixed. This contributes to the overall cost-effectiveness of owning a home constructed with Alu-Form technology. Moreover, its use vastly reduces the chance of on-site mishaps, making it one of the safest systems for building construction currently available.
Factory-built modular construction using pre-manufactured components like roof and floor trusses that can be assembled quickly, bring major savings on construction time and labour costs, and the housing conforms to most standards of structural integrity, safety and environmental impactAlu-Form construction technology involves extremely efficient, light-weight and flexible materials, and it cuts down the need for messy brickwork, concrete leakage, and use of conventional, polluting construction equipment. It is, therefore, one of the most environment-friendly construction techniques. Significantly, the technology puts an end to the problems of construction irregularities and asymmetrical aesthetics which plague even the best of projects. The finished units are flawlessly balanced and streamlined, providing a finished and sophisticated look and feel.
The basic equipment used in Alu-Form construction technology can be reused over up to 300 times, which means that there is significantly reduced wastage. The implied savings during the construction process can then be passed on to buyers, making the technology one of the most viable means of delivering budget housing in larger cities. Since it involves less skilled labour and conventional construction materials, it is ideally suited for speedy completion of affordably priced homes. The adoption of this revolutionary construction technology is a vital step forward in making budget housing available within market-viable timelines. It will play an extremely important role in bringing India a step closer towards meeting its massive shortfall of affordable housing.
Technologies like PEB, System Formwork, Precast, and Drywalls, along with machineries like cranes and hoists are reducing the overall construction time of projects.The Prestige Group has also adopted aluminium formwork, for a few projects, instead of the conventional RCC structure+ block masonry+ plaster. "We always welcome new technology, but deciding which of these technologies we can adopt is done only after due diligence, as it has to suit the purpose and be accepted by end users also," says V Gopal.
"We prioritize our requirements before we select our equipment supplier. Our top priority is the safety of the workers using the equipment. We also make sure that the maintenance issues are minimal; products have a good brand name in the market, and an excellent performance record. We do take into consideration the initial cost of the order,’ says Shah, Wadhwa Group.
Sanjay Jain informs that the Siddha Group’s vendor selection in order of importance is the vendor’s performance record, brand name, prompt after-sales service, total solutions provider, initial cost, production flexibility, and ease of operation and maintenance. "Apart from these factors, the integrity and track record of reasonable and fair dealing of the supplier are also important aspects that we keep in mind while taking the final call," he says.
According to V Gopal, Prestige Group, the selection criteria followed by them include selecting the technology suitable for the design under construction; the equipment provider’s track record with them as well as with other developers in the region; competitive pricing; ease of use, technology transfer, training to site personnel, robustness of product, repetitions, shelf life, etc; and ease of storage and handling. "Generally, we outsource the construction and equipment procurement through a bidding process. The successful bidder then does the needful," says V Gopal.
The RERA Effect
Developers like Capacit’e believe that the RERA Act will have far reaching consequences on the construction industry in India, including the residential building segment. Key impacts include reduction in risks arising due to delays in obtaining clearances during the construction phase as under the Act, statutory clearances for a project are required to be in place prior to commencement of construction; increase in the speed and security of payments due to the mandatory deposit of 70% of the proceeds of a project in an escrow account; emphasis on timely delivery of construction services; and demand for quality and durability of construction. The Act also protects buyers against project delays by requiring that developers refund the amount paid along with interest in the event of a delay. "We believe that with the RERA Act, the real estate sector will witness a significant rise in demand for services from specialised construction service providers for end-to-end services, like us," says Rohit Katyal.
Opines Sanjay Jain, Siddha Group, "The introduction of RERA is a very positive initiative that will benefit both the home buyer and the developer. It will bring in the much-needed transparency in the real estate sector as all the legal framework and financial, commercial details have to be shared with the buyers who will have a right to inspect and check such information. The developer becomes accountable for the quality of work, timely delivery of the property along with the fair and reasonable commercial dealing with the buyer. In default of any of the aforesaid parameters, the developer is liable to penal charges and is held responsible for the same. There is a provision of providing 5 years’ defect liability period which is like a warranty and beneficial to the buyer. However, the new Act will temporarily create confusion till all the processes have been practically implemented, like when SEBI was implemented there was a huge confusion in the financial market for a year or so. Similarly, when this initial period of confusion will be over, RERA will have long term benefits, and a significant impact on the real estate sector. It will also establish a smooth mechanism in the processes, going forward.
On a more cautious note, Surendra Hiranandani, CMD, House of Hiranandani, comments: "RERA is a defining moment in the Indian real estate sector. It will bring in a systematic approach and enhance transparency, which will aid growth of the sector. To the buyers, it safeguards their interests: brings transparency, ensures accountability and timely completion of projects. Unfortunately, RERA does not address the concerns of the developers by not providing a level playing field for all the stakeholders. From an industry perspective, it will increase credibility in the long term leading to higher domestic and foreign investments. The law will ensure fiscal discipline, but increase the demand for credit."
RERA does not bring the government authorities into the ambit who are responsible for the continuous changes in regulations, lack of transparency and predictability in functioning. If approvals are not streamlined in time, cost revisions and delays will become unavoidable. Surendra Hiranandani, CMD, House of Hiranandani
He adds, "Though the objectives are noble and correct, we believe lack of clarity on the various mechanisms proposed will only add to costs through delay, making projects more expensive. For instance, it is not clear whether RERA applies to under-construction units as well. The central rules state that these would apply to under-construction units while state rules say otherwise. But, can existing projects comply with retrospective legislation?"
According to him, while the Bill certainly appears to be consumer-friendly, in reality, it could be counter-productive as a minority handful can obstruct a pro-development proposal. Similarly, it dissuades joint ventures between developers and landlords by terming them as promoters. Many landlords would be sceptical of taking all the responsibilities of the project and hence will be discouraged to tie up with developers. This will further restrict supply of land or make it more expensive through higher upfront payments.
Most importantly, the Bill does not bring the government authorities into the ambit who are responsible for the continuous changes in regulations, lack of transparency and predictability in functioning. If approvals are not streamlined in time, cost revisions and delays will become unavoidable. The outcome of this is going to be more expensive products for consumers. The World Bank in its report on Ease of Obtaining Construction Permit Index ranked India 185 out of 187 countries. This means India is in the same category as war torn countries where institutions have collapsed. Owing to lack of holistic approach, the end price to consumers will continue to rise, putting a severe strain on affordability. Also, in an attempt to protect consumers, it has come down heavily on developers by including criminal penalties. This is unfair to genuine developers as most delays usually happen owing to delay in approvals. This will further dissuade any new entrants from venturing into the Indian real estate sector."
Opines Irfan Razack, CMD, Prestige Group, "The Real Estate Regulatory Bill, passed by Parliament in 2016, will be the transformational legislation on how real estate business is done. It advocates a completely different method of conducting business, starting from registration of a project after approvals before the launch to keeping 70% of the collections in a designated account meant solely for that particular project, timely completion and delivery, commitment to specifications, total transparency in terms of availability, as well as a five-year warranty post completion. All this and more will make the Real Estate Developer that much more accountable and responsible to the home buyers, will eliminate the weak, the freelance and the fly by night operators, and will bring in overall professionalism and accountability. It will also bring in a lot of consumer activism. These steps though, while protecting the customer, will have an impact on the supply and increase the cost of the product. This in turn will increase the price, which the customer will have to bear. While there is a lot of expectation overall, the expectation that the price of property will correct itself downwards is baseless."
RERA legislation will make the Real Estate Developer much more accountable and responsible to the home buyers, will eliminate the weak, the freelance and the fly by night operators, and will bring in overall professionalism and accountability. It will also bring in a lot of consumer activism. Irfan Razack, CMD, Prestige Group
He adds, "While the Regulatory Bill was implemented on 01 May 2017, sadly, the Government machinery, both official and political, has not been made accountable as a part of this legislation. Hence, getting approvals for building developments quickly and in time, including services and occupation certificates, still remain a challenge. The sooner the Government realizes this and implements measures to set right this deficiency as a part of their endeavor for ‘ease of doing business’, the faster the economy can grow. This will also help the business of real estate and property development to be conducted in a seamless and transparent manner."