An overview of Digital Construction in India
Architecture, Engineering and Construction (AEC) is the second largest industry in India and one of the key drivers of the country’s economy. With increase in population and urbanization, the Government of India is giving massive importance to the infrastructure development of the nation. The government has come up with several plans like smart city mission, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), New Metro Rail Policy, Housing for all, North East Special Infrastructure Development Scheme (NESIDS), etc. To maximize expediency, environmental sustainability and cost efficiencies, the government is also progressively exploring opportunities to harness a range of new-age technologies like Internet of Things (IoT), building automation, Artificial Intelligence, Big Data, Blockchain and Building Information Modelling (BIM).
A research report published by KPMG says that the development of India is highly dependent upon the infrastructure sector and the country has become a large market for infrastructure and construction activities with the contribution of US $738.5 billion in the FY 2017 and is expected to become 3rd largest market in the world by 2025.
On the sidelines of Autodesk University Conference, we talked to experts from Autodesk, Theo Agelopoulos, Director of infrastructure industry business strategy and marketing, and Vikram Dutt, Senior Director, Building – Business Strategy and Marketing, and tried to find out how the country is digitalizing its construction industry, what are challenges it is facing and how Autodesk in fuelling the growth of the country in terms of digital construction.
Role of Emerging Technologies in India’s infrastructure development.
Vikram Dutt: If you look at the demand of new housing, we have to build 13,000 new buildings a day around the world, and in India alone we need to build 1700 buildings a day, so traditional ways of designing and building will not work. We have to use digital technologies, we have to use BIM for better connect designs and construction. Construction for the most part, has been really analogue way of doing business so our first step is really getting there and digitize. The next step would be connecting design and construction by extending BIM further down to construction.
If you think about macro trends for us then 65% of the worlds construction output will come from China, India and Indonesia, for us these are the three key markets for us to focus on. I see that the trend of adopting new technologies is accelerating in India.
Adoption of BIM in India
Vikram Dutt: On the design side, the base of BIM adoption is accelerating and I would say it is not far behind to the mature countries. On the construction side, it is early days and a long way to move digital in India. The first step is to make sure that the construction workers have information about the latest design and are able to do simple things like for example, marker up a design change and send back to the architect. It has nothing to do with what a laborer who is actually assembling the building.
Theo Agelopoulos: The benefit for India is that they can look at what has happened in other countries and they have the ability to go faster because they can learn what worked and what did not work. The country can adopt practices that would allow it to move faster. In UK for example, there is very quantitative data that talks about 20% RoI that is in the design and construction stage and reduce risks and so forth. The reason why countries like the UK are putting in place BIM because they know they need to digitize the operations part for their assets. When you look at the total lifecycle cost of an asset then 80-85% of it is actually the long term operating cost. So, it is how public and private sector agencies are preparing themselves to realize that benefit or RoI down the road. What is exciting about the Indian market is that 10 years ago we were trying to convince the market to use BIM. But now when I talk to industries and people in India, they want to go faster. There is a real sense of urgency. They know they want to do it and they are doing it and they are looking at companies such as Autodesk to help them do it faster.
From benefits of learning what the other governments and countries did with mandates, realising best practices and working with private industries, I think that is going to help India get there faster than the other mature markets.
Projects Designed On BIM
Vikram Dutt: We are working with DMRC(Delhi Metro Rail Corporation), Chennai Metro Rail where we are mandated to use BIM 360. In the Pune Metro project, almost all the metro stations by default are designed on BIM. Lucknow Metro project is also coming up, we are engaged with that as well. Hopefully, we will have a few more rail projects soon.
Theo Agelopoulos: There is a different level of maturity with adoption of BIM, between the building industry and the traditional civil industry in India. What we are trying to do is to get the civil industry go faster. And we are doing that especially in projects that include both horizontal and vertical assets. Rails are a good example because generally half the costs are in linear assets and the other half is on vertical assets. What they want is integrated project delivery approach, they are projects where we are actually seeing faster adoption. That’s why we are working with these types of customers as they see the benefits on the facility side, building and station side and thus are ready to adopt BIM on doing track layout, bridges, retaining walls and different asset types that make up the complex projects.
Public-private partnership model in India
Vikram Dutt: India has a great potential when it comes to the PPP model. If you look overseas, there is Morgan Stanley Infrastructure Head, Macquarie Bank, and other private enterprises. The reasons they invested in these PPPs because they felt they could make money. I think that was the case here and a lot of the fund was invested differently, it was funded by construction companies, so forth. So, I think the dynamics into the private industry or private banks if they can get a high level of return. There has to be the change in the equity model that makes sense for these banks to invest.
Theo Agelopoulos: A lot of projects in India are government funded. There is a huge scope of improvement between how the government funds projects and how they pay for projects and the type of business models they put in place. Now, we have reverted to more traditional business models. If you look in the markets outside India where the infrastructure has been developed and built faster they have actually used PPP. So, I think we have to get back to a private public partnership in India as well. Over the next several years, I think that’s going to be one of the big challenges so does the government make sure that these types of business models are functional in the Indian economy.
Trends in mergers and acquisitions
Vikram Dutta: Right now it is a pretty competitive market and there are lots of regional players. Consolidation in the industry is definitely going to continue. But, it is going to be a couple of major players after all this consolidation. I believe Autodesk has a competitive advantage which is our strength of design. In construction, they just focus on moving paper to 2D using mobile, cloud to have access to that model. But for all the things we need to achieve to get 13,000 buildings build in a day, just digitization would not do. We need to have more streamlined end-to-end process. Autodesk is able to do that, and that is going to be a big differentiator from others.
Challenges in adopting new technologies.
Vikram Dutt: This can be broken down to a number of things. If you look at the number of architectural professionals compared to the population of the country, it is a very small fraction. I believe India has 80,000 architects for 1.3 billion population and that is a pretty low number. Getting qualified people is definitely a challenge, but we don’t have the same problem on the engineering side. In fact, we actually have the highest number of engineers but on the architects side, we do have a smaller number. The other challenge has been the affordability of our software. But, we have taken steps to make our software more affordable and more commensurate to the salaries earned by architects and engineers here.
Theo Agelopoulos: One thing that I would add on the Engineers side is that young engineers coming out of school need to be immediately productive, but it is not happening, there is a gap. A lot of the Indian engineering firms have to make a big investment on those young recruits. The question is how the gap can be bridged so that young engineers coming out into the workforce are more productive immediately. The answer to it is education element that we certainly are looking at and would want to invest in.
Future of Digital Construction in India
Vikram Dutt: I think it’s going to grow at a faster rate, hopefully, double fast as some of the other mature markets because what I see here is an appetite and interest at a very high level in government to go faster. In the coming five years, it will grow at a much higher rate than we were traditionally seeing in the previous five years that’s what I would expect.
The Prime Minister of India, Narendra Modi has actually got a mandate on infrastructure, The one which is something that I feel is going to accelerate this process of infrastructure is that the promises he has made to the people of the country. There are numerous projects in India as I said earlier, it needs 1700 buildings a day, 100 airports to be built, 9000 railway stations to be refurbished and redesigned, freight corridors to be designed.
Theo Agelopoulos: I would expect India to be well on its way to have an option of digital construction in the next five years. As you have seen in other areas, it starts with some of the more iconic bigger projects, whether it be building or infrastructure design and that’s how it percolates down the ecosystem.
Role of Autodesk
Vikram Dutta: Autodesk has great programs in terms of working with our partners who actually deliver a lot of implementation and training for customers. We also have our Autodesk training centres across the country. Another interesting thing that is happening in educational institutions are that the curriculum are being built on BIM. We have many examples where BIM is part of the curriculum, and we are going to double up in the engineering sector. So we hope to do that. Architect students who are passing out today, mostly come out with the knowledge of these technologies. But to have a complete BIM, we also need engineers to actually be there who have knowledge of structural engineering, civil engineering, etc. so we are focusing on that.
Theo Agelopoulos: In India, what we have to do is to upscale the construction industry as we do not have enough people with skills. I look at it from a different perspective that what we should be trying to upscale their skills so that they become more employable and their career growth moves up. One of the major difference between emerging markets and the Western world is that later is about teaching technical skills. Therefore, I see this as an opportunity to elevate and help India reduce poverty and also develop skills that helps the country develop faster. It is our duty to help India get there faster and we all have obligations. We as a technology company too have social values and enable better lives we are not here to just make money. This is an important part of the things we do.One example is the UNHCR where we give our software free of cost to institutions and send people over there for free in order to provide social benefits to those communities. So I think, we all have an obligation.
We have made a decision five years ago where we make our software available for free to institutions and students, so that’s really led to our providing access to our curriculum so they can train.