Coronavirus lockdown 2.0: Builders tread cautiously before resuming construction

The country may have begun a staggered exit from the coronavirus lockdown as curbs on economic activity have been lifted but construction activity across sites remained stalled as most real estate developers decided to tread cautiously until all restrictions are removed.

“We have decided to adopt a wait and watch approach until the lockdown is lifted. There are still issues with supply chain and several restrictions with regard to construction activities in hotspots,” said a real estate developer.

“We are unable to start construction. The biggest hurdle is that of the supply chain not yet being restored. Besides there are too many hotspots and there are too many risks involved to immediately start construction. Don’t forget this is a capital intensive business,” Amit Modi, President- elect, Credai Western UP, told Moneycontrol.

Real estate developers are being cautious and some are not eager to start construction work due to stringent restrictions in place. One of them is to do with the fact that if anybody gets infected on the construction site after work has started, the area would be sealed and all related people will be quarantined for 14-28 days. Construction would come to a grinding halt. Also, FIR will be lodged against the promoter, in this case the real estate developer.

The coronavirus count in Uttar Pradesh has risen to 1,294 on April 21 as 110 more people tested positive for the infection.

“Keeping all these conditions in mind, we have decided to adopt a wait and watch approach,” Gaurav Gupta, president, CREDAI NCR – Ghaziabad, told Moneycontrol.

In Haryana, some developers have applied for permissions but are worried that there may be issues with raw material supplies. Pravin Jain, Vice-President, Naredco and CMD, Tulip Infratech Pvt Ltd, told Moneycontrol that his firm had applied to the nodal agency Gurugram Metropolitan Development Authority (GMDA) for permissions to start operations.

“The issue is that cement factories have not yet commenced work. We have decided to wait for three or four days for cement companies to resume operations and deliver supplies. Shelf life of cement is 40 days. We have sought permissions online from GMDA for work to start,” he told Moneycontrol.

On April 21, four fresh cases surfaced in Haryana, taking the total to 255. Among the new cases, two were reported in Sonipat and one each from Gurugram and Faridabad.

In Maharashtra, construction has been allowed only in green and orange zones and that too on a case-by-case basis. The government had also allowed work in construction projects within municipal limits where workers are available on the site. However, this relaxation will not be applicate in the MMR and the PMR.

“Most of our labourers have gone back, there is shortage of raw material. Some developers have applied for permissions but we are all in a wait and watch mode,” says Satish Magar, president, Credai National.

Maharashtra is the most-affected state in the country with the number of COVID-19 positive cases crossing 4,000 mark and death toll rising to over 200.

On April 15, the government relaxed guidelines for lockdown 2.0 permitting some construction activity in the non-COVID-19 hotspots starting April 20. However, this is only provided strict social distancing guidelines are follow

Under the fresh guidelines, contractors along with developers will need to ensure that social distancing is maintained at the sites and will need to find ways and means of achieving it. For basic hygiene and safety precautions, companies can regularly sanitize sites and provide labourers with masks, soap and sanitizers for washing hands frequently.

The Department of Promotion of Industry and Internal Trade had earlier written to the Ministry of Home Affairs and suggested that “housing and construction sectors need to be allowed if the labourers stay at the sites with all facilities and safeguards, contractors shall ensure safety sanitation and distancing norms.”

According to KPMG, total construction projects worth more than Rs 59 lakh crore are under development, most of which would have been impacted severely by COVID-19. The Indian construction sector employs over 49 million people, close to 12 percent of the nation’s working population. Further, it has a multiplier effect on nearly 250 allied industries.