indiamarkets: Can you elaborate on the basic problems the Indian construction industry faces today and what needs to be done?
Srivastava: There are three issues that need to be addressed. First of all, there is no denying that for a population of one billion, the quality of infrastructure is poor and hence there is an urgent need to provide more infrastructure. Once the need is defined, then we have to create a policy framework, which will allow the investment to flow into infrastructure. Once this is done, the third issue is that the construction industry should be ready with project management skills, technology and human resources that would be required to implement complex task of providing infrastructure. Building the nation’s infrastructure needs to be looked at as the first priority.

indiamarkets: The number of infrastructure projects actually taking off is very small. Many equipment providers are entering the market. Do you think that all are eyeing the same, small pie?
Srivastava: No, this market is not small. What we are seeing is the consequence of the last three years during which there has been not much activity, as originally envisaged. What we ought to see is the future. If the investment starts flowing and if infrastructure remains a top priority of the government, then there will be a boom.

We should compare the present scenario with that which existed in telecommunications in the 1980s. The telecommunication infrastructure was as bad as the physical infrastructure is today. Now telecommunication infrastructure is the backbone of the IT revolution. This was enabled only in the last 15 years or so. So I think that when things start rolling, it builds it own momentum and once momentum builds in, there will be a much wider market and we have to be ready for it.

indiamarkets: What synergies do you see between IT and the construction equipment industry?
Srivastava: Information Technology, whether it is Business-to-Business (B2B) or Business-to-Customer (B2C), is a process facilitator. IT cannot build infrastructure. IT can make the processes for building infrastructure more efficient. IT will definitely have a major role in the construction sector, in fact in every sector.

indiamarkets: The growth of the industry is also hampered by the fact that the contractors themselves are apprehensive to pay the high cost of sophisticated equipment. Do you feel that is an issue?
Srivastava: Not really. Because the demands of construction – especially with the projected provision of infrastructure - are so high that low cost technology is not an option. One has to decide whether one wants to be a major or minor player. Anybody who plans to be a major player in construction will not be able to ignore hi-tech and quality equipment. Ultimately, it is not a question of high or low technology, it is about profits. If high technology can give one, more profits, then I don’t see any reason for contractors not to adopt hi-tech and quality equipment.

The interviewer can be contacted at shanth@indiamarkets.com