COAOI - Creating a Favorable Environment

Premal Thaker, President, Crane Owners Association of India
COAOI engages with the government and relevant stakeholders to promote a more conducive business environment so that crane rental companies can operate efficiently and contribute to the nation’s infrastructure development while maintaining safety and compliance standards, avers Premal Thaker, President, Crane Owners Association of India.

How has the Indian crane rental market evolved and what are the new trends?

The Indian crane rental market has witnessed significant growth and evolution in the recent years. There is increased demand for crane rentals due to infrastructure development projects, urbanization, and industrial expansion. There has been a shift towards renting specialized and technologically advanced cranes to improve efficiency and safety on construction sites. Additionally, there’s a growing emphasis on environmental sustainability, leading to the adoption of eco-friendly and energy-efficient crane models.

What is the growth potential of crane rental business and what are the key factors that impact their economic viability and long-term sustainability?

The crane rental business in India has substantial growth potential, driven by ongoing infrastructure projects, such as roads, bridges, metro systems, and power plants. Key factors impacting economic viability and sustainability include fleet management efficiency, equipment maintenance, adherence to safety standards, and competitive pricing. Companies need to invest in modern, reliable cranes, operator training, and effective customer relationship management to thrive in this competitive market.

What are the challenges being faced by this industry and how can the issues be addressed?

Primary challenges in the crane rental industry include customs duties, varying state taxation policies, lower rental rates, delayed payments, disputes with project owners, and OEM-related issues. Collaborative efforts between rental associations, major companies, and OEMs should focus on advocacy for reduced customs duties, uniform taxation policies, and dispute resolution mechanisms to ensure a more favourable operating environment.

As there are very few crane OEMs that manufacture only lower tonnage cranes, rental companies often have to import cranes which not only attracts heavy customs duties but also means that companies have to import spare parts throughout the crane’s lifespan. Additionally, different states have varying taxation policies for crane entry. What steps is COAOI taking to help the government understand the challenges faced by rental companies and to minimize customs duties and road/state taxes for them?

COAOI is committed to addressing the challenges posed by the limited availability of lower tonnage cranes from domestic manufacturers and the associated customs duties and spare parts imports. Our approach involves advocating for local manufacturing, reducing customs duties, sharing knowledge, optimizing supply chains, emphasizing safety and quality standards, and fostering collaboration with OEMs and government incentives. These steps are designed to create a more favorable environment for crane rental companies and promote the growth of the crane industry in India.

Our association actively engages with the government and relevant stakeholders to highlight the challenges faced by crane rental companies in India. We advocate for reduced customs duties and more uniform taxation policies to promote a more conducive business environment, which ultimately benefits both our industry and the Indian economy. Our focus remains on ensuring that crane rental companies can operate efficiently and contribute to the nation’s infrastructure development while maintaining safety and compliance standards.

How is the Association trying to resolve issues like lower rental rates, delayed payments/non-payments, disputes with projects owners and OEMs?

COAOI is actively involved in endorsing the interests of crane owners and resolving issues that affect our members. We work to negotiate fair rental rates, provide dispute resolution services, enforce payment terms, offer legal support, provide training, and foster collaboration within the industry. By taking these measures, we aim to create a more favourable and secure business environment for crane rental companies in India.

Successful and timely completion of projects depends not only on high-tech equipment/cranes but also on operator skill. How does COAOI promote greater safety skill development?

Safety and skill development are paramount in the crane rental industry, and COAOI along with its member companies is dedicated to promoting and enhancing these aspects. We conduct Safety Awareness Programs, Operator Training and Certification, Regular Workshops and Seminars, Best Practices Sharing, Safety Guidelines and Manuals, Technology Adoption and lend support for Skill Development.

Through a combination of safety programs, trainings, certifications, best practices sharing, technological advancements, and collaboration with educational institutions, we aim to ensure that crane operations are conducted with the highest regard for safety and competence, ultimately contributing to the successful and timely completion of projects.

There has been a shift towards specialized and technologically advanced cranes to improve efficiency and safety on construction sites, plus energy-efficient crane models.

What kind of business support do you believe would be valuable from OEMs, particularly regarding solutions for idle machines, maintenance, refurbishment, easy financing options, and timely spare parts supply?

COAOI - Creating a Favorable Environment
Business support and solutions from OEMs can greatly benefit crane rental companies in various ways and optimize their operations in the following ways:

  • Utilization of idle machines, which is crucial for improving the profitability of crane rental companies, can include demand forecasting, leasing arrangements, or shared usage platforms to connect idle machines with potential renters.
  • Maintenance and refurbishment services that are tailored to the specific needs of crane rental companies can include comprehensive maintenance packages, refurbishment options to extend the lifespan of equipment, and regular equipment health checkups.
  • Collaborations with financial institutions to offer easy financing options to crane rental companies. This could involve competitive lease or loan arrangements that help rental companies acquire new equipment or replace aging ones without a significant upfront financial burden.
  • Since reliable and timely supply of spare parts is crucial for minimizing downtime and maintaining operational efficiency, OEMs can establish efficient spare parts supply chains that ensure quick availability of essential components. This could include central warehouses, regional distribution centers, and online ordering platforms.
  • OEMs can provide technical support and training programs to crane rental companies; this will ensure that operators and maintenance personnel are well-trained on the equipment, reducing the risk of accidents and optimizing equipment performance.
  • They can offer extended warranty and service agreements to provide additional peace of mind to rental companies. These agreements can cover maintenance and repairs, reducing operational risks and costs.
  • They can provide remote monitoring and diagnostic services which will allow crane rental companies to proactively address equipment issues, leading to improved uptime and reduced maintenance costs.
  • They can collaborate with rental companies to implement efficiency enhancement solutions, such as telematics systems and equipment tracking software - tools that help in better asset management and utilization.
  • OEMs can introduce environmentally friendly and energy-efficient crane models. Additionally, they can offer guidance on how to reduce the carbon footprint of crane operations, aligning with sustainability goals.
  • OEMs can offer flexible equipment configurations to cater to the diverse needs of crane rental companies. This may involve customization options, modular designs, or versatile equipment that can adapt to various job site requirements.
  • They can provide specialized operator certification and training programs as this will not only ensure safe and skilled operation but also help in enhancing the reputation of crane rental companies.
By offering such support, OEMs can strengthen their partnerships with crane rental companies, improve overall operational efficiency, and contribute to the growth of the crane rental industry. This collaboration is mutually beneficial, as it will help crane rental companies deliver high-quality services and extend the lifespan of their equipment.

Crane rental companies need to invest in modern, reliable cranes, operator training, and effective customer relationship management to thrive in this competitive market.

Is it possible to have a consensus by rental companies on a standard hiring price in order to maintain a sustainable business operation?

Achieving a consensus on standard hiring prices among rental companies can be challenging but is not impossible. However, several factors like market diversity, competitive market, anti-trust laws, varied cost structures, etc. make it a complex issue.

But there are alternative ways to work towards fair and transparent pricing practices within the industry. This can be accomplished through the collaboration of COAOI, data sharing, ethical commitments, and a focus on providing value to customers while maintaining sustainable business operations.

Local manufacturing, reducing customs duties, sharing knowledge, optimizing supply chains, emphasizing safety and quality, and collaborating with OEMs will create a more favorable environment for crane rental companies.

What growth avenues is your company Oasis infrastructure exploring in FY 23-24?

Oasis infrastructure is an equipment rental company offering various construction equipment such as cranes, piling rigs, boom lifts, etc. These machines are engaged across India in various important construction projects such as metros, refineries, high speed rail, ports, dam constructions, chemical plants, bridges, airports, etc.

To grow our business, we are exploring opportunities in emerging markets and regions with high infrastructure development activities. In addition to our existing fleet, we may consider diversifying our equipment offerings to meet a broader range of customer needs. We are also trying to embrace advanced technologies like telematics and data analytics to enhance our operational efficiency, reduce downtime, and improve overall service quality.

We are also strengthening partnerships with equipment manufacturers which can lead to mutually beneficial arrangements, marketing collaborations, or exclusive equipment deals. Plus, we are enhancing our online visibility and using digital marketing strategies to attract more customers and improve brand recognition.
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