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Construction Management
ABSTRACT INTRODUCTION Indian Construction Industry: Construction Sector – Overview Reference:
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Today, India is the second fastest growing economy in the world
Today, India is the second fastest growing economy in the world. The Indian construction industry is an integral part of the economy and a conduit for a substantial part of its development investment, is poised for growth on account of industrialization, urbanization, economic development and people's rising expectations for improved quality of living. In India, construction is the second largest economic activity after agriculture. Construction accounts for nearly 65 per cent of the total investment in infrastructure and is expected to be the biggest beneficiary of the surge in infrastructure investment over the next five years. Investment in construction accounts for nearly 11 per cent of India’s Gross Domestic Product (GDP). € billion is likely to be invested in the infrastructure sector over the next five to 10 years - in power, roads, bridges, city infrastructure, ports, airports, telecommunications, which would provide a huge boost to the construction industry as a whole. Investment into this sector could go up to €93.36 billion by FY2010. With such bullish prospects in infrastructure, affiliated industries such as cement are on a high. Cement consumption, for the first time, is set to exceed the 150-million tonne mark. Reflecting the demand for the commodity, capacity utilization rose to over 100 per cent to touch 102 per cent in January 2007 with dispatches touching million tonnes as against the production of 14 million tonnes. As opportunities in the sector continue to come to the fore, foreign direct investment has been moving upwards. The real estate and construction sectors received FDI of € million in the first half of the current fiscal year.
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Economic Overview: India’s economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries and a multitude of support services & industries. Production, trade, and investment reforms have provided new opportunities for Indian businesspersons. India has an estimated 350 million middle class consumers: • India is the second fastest growing economy of the world at present. India has recorded one of the highest growth rates in the 1990s. The target of the 10th Five Year Plan ( ) is 8%. India’s services sector growth of 7.9% over the period is the second highest in the world. • India is a young country with median age of population being 24.6 years & one-third of the population is below 14 years of age. • Long run GDP growth from mid 1990s has now stepped up to 6.5% from an average of 5% a decade & half ago and less than 3% two decades ago. • The average annual growth rate for the next few years is expected to be7%to7.5% • The opportunities unfolding in India is as a result of reforms enacted from early 1990s as well as a result of India’s increasing competitiveness & confidence • A unique feature of the transition of the Indian economy has been high growth with stability.
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Administration and Regulations of Construction Industry:
Construction Projects are subject to a host of Central and State laws simultaneously. Administratively and in terms of regulation, Central & State Governments have their own roles to play in Construction. Structure and Role of Construction Administration: • Structure and Role of Construction Administration of Central Government & • Structure and Role of Construction Administration of Local Government Reference:
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Industry segments 1. Real Estate:
Residential (housing and development) Industrial (industrial parks, factories, plants etc) Corporate(office, research centres) Commercial (retail malls, shops , showrooms hotels)
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Industry segments 2. Infrastructure : Roads Railways
Urban infrastructure Ports Airports Power
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Real Estate Indian Real Estate is a €8 bn (by revenue) Industry in India. It is projected to grow to €34 bn by It has witnessed a revolution, driven by the booming economy, favourable demographics and liberalised foreign direct investment (FDI) regime. Growing at a scorching 30 per cent, it has emerged as one of the most appealing investment areas for domestic as well as foreign investors. The second largest employing sector in India (including construction and facilities management), real estate is linked to about 250 ancillary industries like cement, brick and steel through backward and forward linkages. Consequently, a unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times.
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Roads India has one of the largest road networks in the world, aggregating to approximately 3.34 million kilometers. (Economic Survey ) The Government has laid down ambitious plans for development and upgradation of the domestic road network. Private sector participation through PPPs is being actively encouraged to achieve greater efficiencies in development, operation and maintenance. It is estimated that the total investment requirement for development and upgradation of the country’s road network over the next five years is approximately US$ 55 billion. (Economic Survey )
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Ports India’s coastline of 7,517 kilometers is spread over 13 states and houses 12 major ports and 187 non-major ports. (Economic Survey ) Traffic handling at these ports has been increasing at an average of 10% per annum over the past three completed financial years. Average turn around time at the major ports is presently in the region of 3.5 days, as compared with 10 hours in Hong Kong – reflecting the potential for increasing the global competitiveness of our ports.
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Airports Domestic and international air traffic over the past three financial years has been increasing at over 35% per annum. It is estimated that the total investment requirement for expansion and modernization of the country’s airports to counter the aforementioned traffic increases is approximately US$ 10 billion. (Economic Survey ) Projects for upgradation, operation and maintenance for several major airports including the Delhi, Mumbai, Hyderabad and Bangalore airports are already in the process of being executed/ have been executed:
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Railways Indian Railways is the world’s 2nd largest rail network under single management. (Economic Survey ) Passenger traffic and freight traffic have been increasing at an average of 7% and 9% respectively over the last three financial years. By 2012, Indian Railways expects to handle double the traffic it already handles. To scale up manufacturing capabilities sufficiently to meet the increasing flow of traffic, the total investment requirement for modernization and upgradation of the country’s rail networks and rail infrastructure is approximately US$ 75 billion. (Economic Survey )
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Power Increased manufacturing activities and a growing population are also causing a surge in power usage. India has the fifth largest electricity grid in the world with 135 GW capacity, and the world’s third largest transmission and distribution (T&D) network.
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Urban Development India’s total urban population on 1st March 2007 was 285 million. Allowing up to 100 % foreign direct investment (FDI) under the automatic route in townships, housing, built-up infrastructure and construction development project
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I N D I A ' S C O N S T R U C T I O N I N D U S T R Y
Construction is an important part of the industrial sector and one of the core sectors of India's economy. According to IHS Global Insight, US$175 billion was spent on construction in India in 2007 after growing 156% since Out of US$175 billion, US$140 billion was spent on nonresidential, and the remaining US$35 billion was spent on residential construction. Construction spending is expected to increase to US$370 billion by the end of 2013, with residential totaling US$63 billion and nonresidential registering US$307 billion. This represents a compound annual growth rate (CAGR) of 13.3%.
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Nature of Construction Industry
Construction is constructing, altering, erecting, repairing, and demolishing building, civil engineering, works, and other similar structure. It also contains assembly and installation on site of prefabricated component and building engineering services. Building a house, repairing a road, demolishing dams, erecting bridge, etc are an example of constructions. Industry is a group of related economic classified in accordance with the output or services supplied. Thus, construction industry is a sector of economic activity which erect, alter, repair, and demolish a building, civil engineering works, and other similar structures.
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Characteristics of Cons industry
Characteristics of construction industry can divide by its features of output, its size, government as a main client, nature of demand for construction output, nature of construction work, variety of construction technology, and structure of industry. Feature of construction output are durable or long lasting output such as house, building, road, etc large and heavy units, unique, immobile, complex process, and expensive. Construction industry is capital goods industry. It also requires other industries to support them and contributes gross domestic product of the country. Many worker are required by construction industry. The main client of construction industry is a government regarding to their policy in infrastructure development. Demand of construction is in various types and sizes. There will be different locations, different resources, different inputs and different stages of their process. There are discontinuities and uncertainties in demand pattern.
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Special Characteristics of Cons industry
Construction industry is employment generator In construction industry largest element of amount in the expenditure of national development is introduced. Investment on construction projects is more than 50% of the national budget It has the capacity to absorb 5% of the country's labour force directly All the structure are unique in nature. Design and construction Working condition for all structure is different Weather condition of all structure is different All construction structures are commissioned
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Classification of Civil Engg Works
construction work can be classified into number of ways. The method of classification changes from dept to dept. the following are the common systems of classification of construction works. 1. Minor works, Major works and Projects: this is the most commonly used method of the classifying construction works. It is generally based on the total cost of the work. A) minor works: when the cost of the construction work is less than Rs it is classified as minor work B) major works: when the cost of construction work is betweeen rupees to 100,000 it is treated as major construction work. C) project: the construction work which cost more than 100,000 are called as projects. 2. a) Permanent works: there are certain construction works which are of a permanent nature.
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Classification of Civil Engg Works
B) semi permanent works: when the construction works are neither permanent nor purely temporary they are called semi permanent works. C) temporary works : when the construction work is purely temporary in nature it is known as temporary work. D) original works: when the construction work is of an original nature then it is termed as an original work. E) Repair works: when repairs are undertaken for existing structures, the work is called repair work. 3. a) Light Construction: when the construction work undertaken is light in nature such as the construction of house building, transit sheds and offices then it falls under the category of light construction. b) Heavy construction: A construction work which is a complete project itself, and involve the use of heavy structural members is known as heavy construction. For exa: multi storeyd building, factories highway, railways,dams, airports, tunnels, bridges.
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