Explaining the current scenario Sanjoy Chakrabarthy, Managing Director, Soilmec India, says: ?Most of the piling jobs which were going on for the last few years were primarily for thermal power projects and a couple of major steel plants that were under construction, like the Tata Steel plant. There are not many greenfield projects of that dimension that can keep over 1,200 piling machines which is how many there are in the country, and more coming from the Middle East. As a result people, primarily the rental contractors, have been the hardest hit. Out of 1,200 machines that are there in the country, 50 per cent are owned by rental companies and they are the worst hit because there is no continuity of projects where they are able to deploy the machines, the way they did in the last few years. Moreover, whenever there is a cash flow crisis, the rental companies are the worst hit. This has been the overall scenario from the micro point of view.?
Sanjoy adds, ?From the macro point of view, yes there are Metro projects going on in Chennai, Delhi and some other places as well. Metro projects have a longer gestation period, and are projects where there is piling but not big, progressive piling. The quantum of piling is not of high magnitude as in a greenfield, power plant or a steel plant project. All of a sudden, the power projects have come to a standstill. Real estate may not be that bad but it alone cannot keep everyone busy. So, all of us are waiting for new projects to come up so that we can get back to the momentum of the last ten years.?
?Due to speedy movement in power, road and urban infrastructure projects between 2007 and 2010, a lot of new rental companies and plant hirers who were into other businesses jumped into this business. The rental rates were very good too, but they had no prior experience of the foundation business. So the quality of work or job done had to develop. The rental business was only targeting the availability of the equipment; there was no focus on the efficiency and the performance. If performance dropped, instead of looking for a more powerful machine, projects looked for more rigs. Now the present market has seen rentals dropping by 40 to 50 per cent, due to which a lot of rigs are standing idle and are even available for sale,? points out Jagpal Singh Lotay, Managing Director, Bauer Equipment India.
Jagpal adds, ?There has been an overall slowdown in Indian infrastructure activity due to the lack of investment in new and ongoing infrastructure projects by the government. Today, there have been instances wherein contractors are not keen to participate in new BOT projects due to non-viability, delay in land acquisition, inflations due to delays, high interest rates, delay in payments, etc, which directly impact the purchases of new equipment.?
Ghananeel Molankar, Sales Manager, Crawler Cranes and Foundation Equipment, Liebherr India says, ?We have seen a steep fall in the demand of foundation equipment since the last eight to nine months. The construction equipment industry has a direct proportional equation with the infrastructure sector. If the infrastructure sector booms, equipment sales are bound to happen. The current scenario has slowed the momentum of the industry. Yes, it is true that the vibrancy in the market is lost; having said that, we still hope that speedy clearances of projects will bring back the energy into the industry. But yes, the current situation will have its effect on the current fiscal.?
According to DV Brahme, Regional Manager, MAIT India, the current situation gives no cause for cheer. He says, ?The current situation indeed is grim, with no traces of recovery seen in the short term. However, with a population of more than 1.20 billion and growing urbanisation, India definitely needs to create infrastructure of all sorts. We hope that soon this push for infrastructure resulting from demand will overcome the inertia, and infrastructure building will start gaining speed. We expect to start witnessing the change in the next six to eight months.?
Brahme continues, ?The power sector definitely has the potential to be a major growth enabler. All the other sectors are greatly dependent on the power sector. Unless that sector revives, the other sectors cannot grow. The twin grid failures recently witnessed by the country only underlines this, and we believe that the entire population has fully understood this. We also expect more business from ports and railways. The real estate and industrial segment may take a little longer to show growth.?
Says Surajit Mukherjee, Managing Director, Suretech , ?The demand has completely dropped this financial year but we expect some positive movement from October 2012 and for the growth for foundation equipment to spurt in the year 2013-14.?
?A lot of equipment manufacturers (direct importers or where imported content in the equipment is substantial) are under pressure due to the present market conditions. Internally, costs have risen due to devaluation of Indian currency and externally, there has been a slowdown on the new project launches and pace of existing projects, apart from high interest rates. We are trying to insulate and help our customers by making investments in parts stock, giving them flexible repayment options at low interest rates so that the equipment can be amortised in more than one project. Sometimes, we also try to act as a link between the contractor and equipment owner for deployment of equipment,? says Jagpal.
Opines Molankar, ?According to the Finance Ministry, the rupee has lost a sharp 20 per cent against the dollar in the last year. This has indeed made imports more expensive and business here tougher. Funding from Indian financial institutions has become more expensive compared to the past. Yes, sizeable projects for the moment have been stalled and it has affected every manufacturer doing business in India. Manufacturers like us do not have control on the economic situation; however, we hope that the situation will improve.?
He adds, ?For the moment, to overcome the situation, we have advised our clients to opt for foreign funding for their machines. There has been a significant increase in interest from foreign banks to fund in India. We have come across some foreign banks that are actively operating in India and are willing to help Indian customers by offering better interest rates.?
Codes and specs
?Our codes are outdated. There are specific areas where codes have to be updated and implemented, for example rock socketing and codes for CFA and micro pilling etc,? says Mukherjee. ?There is a gap between the codes and specs of the Indian market and developed markets. I regret to say that even where we have codes and specs, their enforcement is a challenge. We cannot exonerate ourselves from this, it is the responsibility of the manufacturers, along with consultants and contracting agencies, to evolve and enforce them,? says Jagpal. He adds, ?If we look at European, American and to the Far East markets, we see many trends in the development of new applications for foundation and retaining walls. Rock socketing has to be put on new standards, as the requirements on the super structures have increased drastically and in the future, we cannot afford to have non-provable foundations anymore.?
Jagpal further adds, ?As for the alternatives drilling methods, there has to be a standard for piling where concreting is done though the drill string. We do not want to limit this to CFA, methods like the very fast and economic full displacement drilling, the very fast and precise cased CFA method, have to have an entry into the codes and standards to push the technology to the next level. I also want to state that the soil mixing methods are rapidly spreading all over the world but have not been introduced in India yet. This extremely economical way of producing foundations and retaining walls must come to India and the codes must be opened for this.?
Says Sanjoy of Soilmec, ?There is not much of an improvement except for some new technology which is being tried out in the Chennai Metro, which is more specific to the geological and site requirements in that area. Other than that, I do not see any major technological change which has happened in last few years in terms of piling. Although we have been aggressive in trying to push for new technology, as you know, the adaptation of technology here is not that fast. Added to that, the customer?s awareness and their flexibility has not been the best always.?
Jagpal points out, ?The Indian market was used to tripods and then moved to Kelly drilling in the last five to six years, when the market was growing at a good pace. There has been a very limited response to advanced trends like CSM, CFA and FDP, as these are more specific applications and need time for development. The market needs time to imbibe and adopt them. There has been a slow development on these due to lack of suitable new projects and lack of confidence, expertise and exposure of consultants and designers in them. Of late, though, due to fewer newer and viable projects, contractors are also hesitant to try newer techniques.?
?We cannot limit the technology to the CFA and micro piling. We at Bauer believe in the versatility of equipment and the full range of single stroke drilling methods as there are FDP, FDP with lost bit, cased CFA, SMW, SCM, etc. If we want to talk about trends, we have to open our minds to the full range of worldwide standard applications. Positive sentiments and newer applications like, CFA, CSM, sheet piling, micro piling, etc, can be further developed with a push from the government on the ongoing and new projects, and exposure of these me?thods to consultants and designers in the other parts of the world,? Jagpal adds.
Molankar says, ?The continuous flight auger method has not been used on a large scale in India. The main constraints involved in CFA are the soil conditions and the availability of concrete on the job site. CFA is a faster method than Kelly drilling, provided the above constraints are in your control. Considering the geography in India, it can be said that the soil conditions vary widely. These are the probably the reasons that CFA is not being used widely.?
?The Kelly bar piling or more correctly, bored cast in- situ piling, is a mainstream process and it will always remain so due to the unique geology of the Indian continent. The bored cast in- situ piles are essentially high load bearing piles due to their design and they also do not have the constraint of diameter or depth. There is no shifting from it to any other method. There will be some jobs which could be done with alternate method like CFA or driven piles but the percentage is very less. For the ground conditions where it is suitable, CFA is a much faster and cleaner method of piling but it requires certain amount of expertise, correct quality of grout / concrete and precise logistic support in terms of availability of concrete,? explains Brahme.
Jagpal sums up the situation on a positive note: ?The way we see it, as technical leaders, the market is now moving in our direction. Today we can already see that the performance of a rig is playing a bigger role. We can see that projects are designed with larger diameters and greater depth. Effectiveness becomes more important also as the diesel rates have increased tremendously. We expect a rejig in the industry which will be beneficial for all stakeholders.?