Forbes India 15th Anniversary Special

'Lockdown extension tested patience of migrant workers'

Subodh C Dixit, executive director, Shapoorji Pallonji Engineering & Construction, on the impending shortage of labour in the coming months and why construction companies are staring at huge financial losses

Pooja Sarkar
Published: May 20, 2020 02:45:22 PM IST
Updated: May 20, 2020 03:05:57 PM IST

'Lockdown extension tested patience of migrant workers'Subodh C Dixit

Q. How many migrant labourers/daily wage workers do you employ at your sites?
Before the lockdown, we had about 150,000 construction workers across our projects in India. Depending on the volume of the project, there were 150 to 4,000 working on each of them. After the lockdown was announced, construction activities came to a halt. Workers were told to stay put in accommodation camps provided by the company. We provided ration to our workers during the lockdown and carry out health check-ups on a daily basis. Besides, we have created quarantine rooms inside worker camps. The arrangements are reviewed daily to mitigate risks. A trained doctor and nurses monitor the health of workers at every camp.

Q. How many have gone back to their homes?
Following the government’s decision to permit migrants to travel to their home states, there has been a rush of applications from our workers. Most of these workers are skilled in construction trades and are crucial to ensuring work progress. Although organised players like Shapoorji Pallonji Engineering & Construction were taking care of them, the lockdown extension tested their patience. As a result, we are left with a worker strength of 30-60 percent on our projects.

Q. How do you see the labour situation panning out and what will be its impact on the industry?
Construction companies are finding it difficult to convince their labour sub-contractors and workers to stay back. Now that the government has conditionally allowed some sites to resume work, companies are facing a problem of resuming activities in the absence of adequate labour. Also, due to the mismatch of skills among the remaining workers, output and productivity will be impacted. As the supply chain for construction materials normalises, insufficient labour strength could impact the construction operations of these companies.

'Lockdown extension tested patience of migrant workers'Safety personnel explain preventive measures to workers at a construction site

Q. What measures has Shapoorji & Pallonji Group taken to keep its workers back?
It has taken multiple steps, including assuring workers about the continuity of preventive and welfare measures post-lockdown. We are also conducting motivational talks to alleviate their anxiety and urging them not to believe in rumours. Constant communication and engagement with workers are vital to keep them motivated. We are incentivising our workers financially and releasing timely payments. We are also getting support from some of our clients in these efforts.

'Lockdown extension tested patience of migrant workers'Regular temperature checks are carried out by in-house medical practitioners in the accommodation camps for construction workers

Q. Do you expect a shortage of labour because of the way the situation was handled? Do you expect more payouts for labourers going forward?
Yes. It would be a challenge to mobilise adequate number of workers for ongoing projects. Construction companies will need to offer higher rates and other incentives to attract the required number of workers in the months ahead. The construction contracting fraternity has been under a severe financial stress in the last 3-4 years, especially the last year. The corona crisis will seriously impact the revenues of construction companies… almost all of them will face huge financial losses. The financial stress is expected to worsen in the coming year. The liquidity constraints of construction companies and their supply chains are likely to delay recovery efforts. Most companies have requested their clients—both government and private—to help ease the situation by expediting release of certified payments and also by considering additional advances. These payments can be channelised to sub-contractors. This would be crucial to retain workers after the lockdown is lifted.

Q. How much are your daily wage labourers paid?
We employ construction workers through our sub-contractors. The workers are paid as per the Minimum Wages Act and are entitled to other benefits and welfare facilities as per the labour laws. The basic wages range from ₹500-800 per day depending on their skills and the geographical zones they work in. In normal times, they also get overtime. We have paid all our workers during the lockdown.

'Lockdown extension tested patience of migrant workers'

Q. What is your reading of the current situation?          
We are continuously speaking with our sub-contractors to ensure that the worker strength improves in the post-lockdown scenario. We are addressing their grievances to ensure work continuity. However, a section of workers is anxious to return to their home states and some of them could be diverted to agricultural work. It would take at least six months for the workers’ strength to return to normal.

(This story appears in the 05 June, 2020 issue of Forbes India. To visit our Archives, click here.)