Page 64 - Built Expressions - Online Construction Magazine - November 2014 Issue

Cover Feature equipment industry, along with training skilled manpower for construction equipment, will enable large organized rental players to improve their value proposition against the cost-competitiveness of smaller unorganized players. Skill Development Figure 5 • Skilled manpower is an essential factor to ensure safe and effcient operations of construction equipment. In India, the demand for skilled workers was approximately 800,000 people in 2011, and an additional 2 to 2.5 million will be required to manage the feet by 2020 if the industry’s projected growth materializes(see fgure 6). Availability of skilled manpower for construction equipment is already becoming an issue in India,with a potential shortage of around 20% anticipated by 2015. In the short run, unskilled labor is expected to bridge the gap. However, this can create issues for safety, operational effciency, and the life of the equipment. If the industry grows as predicted, the gap could widen to 30% by 2020, Figure 6 given the growing feet size and safety requirements that will require using trained manpower. There will growth of rental fnancing. Hence small contractors. also be a demand for workers with the rental market is expected to grow • Uniform tax regulations: specifc skills to operate specialized at a compound annual growth rate Standardized tax laws across states equipment. Steps must be taken of just 15 to 20% by 2015. Given the can signifcantly boost equipment now to address the lack of skilled industry’s narrow focus today and the purchases, rentals, and resale. manpower. tremendous opportunities for growth, National registration of construction better access to fnancing will help equipment could eliminate the need Challenges to Skill Development broaden the market. to pay multiple lifetime RTO taxes. To bridge this manpower gap, the • More effcient collections: construction equipment industry will Challenges in Equipment Telematics systems with GPS services need to address four challenges: financing can be used to track equipment • Limited pull from the user industry. Best practices from OEMs and fnancing and improve collections. Global In the construction and mining players around the world indicate OEMs provide such systems with industries, 75% of frms are owned that four imperatives can help India their equipment,and some of these by small employers and contractors overcome the challenges of equipment offerings are now being launched in that own fewer than 15 pieces of fnancing and renting: India. equipment. Most of these small-scale • OEM-supported fnancing: OEMs • Developing an ecosystem for the players prefer hiring unskilled labor, could establish in-house fnancing rental business. Creating equipment opting to minimize labour-related arms or forge long-term relationships safety and environmental regulations expenses by providing on-the-job with banks or NBFCs that can reach on par with the global construction training rather than employing PG 64 Built Expressions Vol: 3 Issue: 11 November 2014