3 Ways to Avoid Construction Delays in India
The construction industry is a volatile arena with several external and internal factors impacting the project lifecycle. Delay or deviation from the set construction time and budget only add to the project risks. In fact, delay is one of the most recurring problems in the construction industry across the world and India is no exception. These delays have a domino effect on the project completion time, cost, and quality.
Construction delays are a liability to all stakeholders involved and lead to clashes and sometimes abandonment of the project. Time overruns, especially in infrastructure projects not only increase the completion time of ongoing projects but also hamper the commencement of new projects. These delayed projects consume more economic resources, reduce infrastructure accessibility to the citizens, and slow down national development. All these aspects have a crumbling effect on the economy.
There are two main types of delays that affect the construction industry: excusable delays and non-excusable delays. Excusable delays are unexpected and often beyond the contractor’s control such as access to the site restricted, labour protests, or unexpected weather conditions. Non-excusable delays are delays due to project aspects that can be controlled and avoided by the contractors such as performance, inadequate project planning, quality issues, or delayed procurement.
While excusable delays like weather conditions are beyond control, the Indian construction industry can work on reducing non-excusable delays.
Here are three ways that could help stakeholders mitigate non-excusable delays:
1. Adopting the right technology
As mentioned earlier, construction projects are influenced by internal and external factors. There are multiple stakeholders involved in each construction phase. Delays are often caused due to misaligned project teams, lack of standardized systems and processes, and inefficient communication between stakeholders. This is why digitization is the need of the hour in the construction industry. Adopting digital technology tools enable real-time information accessibility, helps foresee and avoid potential risks and delays and streamline communication among the stakeholders. Similarly, using construction equipment that is aided by technology tools helps faster and accurate construction, better productivity and enhanced project planning and reduction in material wastages.
Delhi Mumbai Expressway project is an example of how digital technology aids better productivity. Using Digital Controlled Machine Graders (DCM) up to 300-350 cum per day of soil was moved and graded as against 100-120 cum per day without DCM, which is an increase in productivity by around 200%. The 24x7 operation further increased the production per day by 50% and at the same time, the contractor could reduce the actual team size required at the site.
2. Implementing bonuses and penalties
Another way to avoid construction delays is by applying bonuses and penalties on construction projects. Early completion should be incentivized with bonuses whereas project extension and late completion should be levied penalties. There are a few examples of India adopting early completion incentivization. In 2017, the Indian government had considered offering a 10% bonus of total project cost for early completion of highway projects through the National Highway Authority of India (NHAI) and the National Highways Industrial Development Corporation (NHIDCL). In 2019, Railway Minister Piyush Goyal announced that railways will be offering incentives to contractors for the early completion of construction projects.
These preset conditions of bonuses and/or penalties can bring in greater discipline for timely project completion.
3. Review the bidding pattern
For public procurements, the Indian government employs one of the three bid evaluation criteria:
· Quality cum Cost-Based Selection (QCBS) - There’s equal weightage on the technical qualifications of the bidder and the cost committed by the bidder.
· Quality-Based Selection (QBS)- Here the evaluation is based on the technical qualification of the bidder.
· Least Cost Method (LCM) - Here the evaluation is based on the cost committed by the bidder.
Currently, LCM or the L1 is the most commonly used method for bidder selection.
The NITI Aayog paper has reported that the current L1 method leads to non-performance, suboptimal delivery, increased cost and delays throughout the lifecycle of public construction projects. In this view, the paper has mentioned ways to rethink the bid evaluation process to ensure high-standard quality and performance for critical infrastructure projects. One way could be by increasing the adoption of the QCBS method for state-of-the-art projects where quality is uncompromisable. The paper also suggested implementing a performance rating system for contractors to ensure quality control. An effective bid evaluation will help achieve the best infrastructure and also boost Indian construction firms to raise their standards for global competition.
To conclude, contractors can do their best to avoid non-excusable delays by adopting digital technologies for effective procurement, planning, and project delivery. On the other hand, the clients and government authorities can use bonuses and penalties as tools to achieve the estimated completion time. Lastly, a revaluation of the current bidding system for public procurement can raise the bar of quality and performance, reduce delays and achieve timely construction of state-of-the-art assets.