Disciplining the Project Construction

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CBRE’s Project Management business line partners with clients to deliver projects from “concept to completion” by implementing cost efficient, leading industry processes to optimize projects, minimize risk and create value. Gurjot Bhatia, Managing Director, Project Management Group, CBRE South Asia elaborates.

 With the overall market moving towards ease of doing business, we can expect potential investors to re-look at the market for investment opportunities. According infrastructure status to affordable housing was an important step towards promoting access to priority lending thereby, spurring supply of low cost housing units across various cities in India. Further, the increased allocation under the Pradhan Mantri Awas Yojana (PMAY) scheme will not only encourage home buyers to invest but also encourage participation from private players to launch projects in this segment. Relaxations in area measurement as well as completion timelines to seek tax exemption are also welcome announcements.

RERA the “Game-changer”

With RERA being implemented across the states, developers are likely to focus on the timely delivery of their ongoing projects and also remain increasingly flexible on pricing and payment structures. Project Management will prove to be a perfect solution to overcome any short-term challenges that developers and other stakeholders may face. More than ever, now, it is extremely important for development companies to institutionalize the discipline of Project Management. A comprehensive Project Management plan, which brings together all project activities to ensure a timely, cost effective and quality delivery of a project, will enable developers to plan, construct and deliver a project with certainty, transparency and in line with the guard-rails of RERA

 The factors driving the adoption of project management strategies

Project management is evolving as the projects are becoming more complex and are increasing in size and scale. Changing dynamics require innovative methodologies and sustainable approach. Management teams run the risk of depending solely on project teams for information on large capital expenditure. This has given rise to project independent governance structures that have evolved from base levels such as site audits, to risk-based internal audits and capital expenditure reviews, and of late, to full-fledged project reviews at particular points in time and / or continuous reviews.

Project Management in fact becomes shorthand for project, program and portfolio management. At an enterprise/execution level, application of robust Project Management optimizes the project cost in number of ways:

• Design Management – value & performance enhancement via value engineering. Cost reduction via material and technology substitutions.
• Identifying Risks – Critical areas, time consuming activities, labour intensive jobs, resource dependent actions, there-by ensuring cost distribution of low and high-risk activities.
• Detailed Program Management – Using tracking tools and software, keeping margins and back up planning for the identified risks, thereby allocating a sundry cost for the back-up in case of high risk actions.
• Human Resource Management – understanding the potential of each team member, allocating tasks and timelines in a customized fashion, thereby optimizing on the overall cost of man-hours required.
• Cost Management – drafting a high-level budget at conceptual stage and aligning it with the resources/funds available. Transitioning this figure into a more detailed budget at the program management level and further breaking it down to the last nail before tendering stage to avoid any surprise costs during construction.
• Procurement Management –Cost negotiations is the key scope here but, it is even more important to manage the timeline and quantity of materials. This avoids material damage for being unused for a long time, cost of storage as well as cost of unused labour in course of delayed deliveries.
• Regular Audits – this includes design audits, quality audits, cost audits and process audits. Possibility of a cost overrun (or even time and scope) can be identified and dealt with at a very early stage, rather than waiting for it to balloon.
• Ethics and Compliance – Ensuring adherence to ethical practices and processes in vendor selection, consultant selection, material procurement, etc. – leads to a robust working system devoid of chances of incapability or under performance, thereby saving cost on rework / revision / replacement.
• Health and Safety – Adherence and conscious observance of health and safety measures, avoids any health hazards / accidents – which in a long term, saves cost on delays and least to mention, damage to the brand’s value.

 As per a CBRE survey, 90% of Indian construction industry still needs to adapt to international standards on planning & delivering projects. Almost 50% projects are affected by health & Safety issues (major or minor), there is a 72% shortage of skilled workforce at all levels and 75% of projects undergo rework due to quality issues.

 The risk management & mitigation

India’s average annual economic loss due to disasters is estimated to be $9.8 billion according to a UN global assessment report on disaster risk. This includes more than $7 billion loss on account of floods. India is a disaster prone country, with 85% of Indian land vulnerable to one or more natural hazards, making it is critical to have plan and gauge an organizations’ readiness to deal with such a situation

Unprecedented rate of urban growth, increasing dependence on complex technical systems, combined with climate change predictions, have increased the disaster uncertainty even more.An integrated and comprehensive approach is necessary to improve the safety of buildings from disasters.The construction industry is central to the need of sensitizing the need of disaster preparedness through urban planning, building procurement, design, construction and upgrading as well as adoption of new age technologies

The need of the hour is to enhance the quality of vocational education and training to make up for the shortfall of skilled project management professionals. Also, there is an immediate need for popularization and extensive use of technology to increase the efficiency, quality and speed of construction.

 CBRE Project management services

CBRE service portfolio is diverse with the team being experienced in delivering projects covering almost every aspect of the real estate segment – including commercial buildings, corporate greenfield campuses, built-to-suit facilities, residential developments, retail developments, research and development facilities, critical facilities, hospitals and other medical facilities, integrated townships, educational and institutional facilities.The services include:

• Program Management / PMO
• Project Management
• Financial Management
• Risk Management
• Procurement Management
• Contract Management
• Design Management
• Construction Management
• OHSE Management
• Quality Management
• Relocation Management
• Project Monitoring
• Project Audits
• Cost Consultancy
• Workplace Strategy

CBRE Project Management group has a portfolio of more than 325+ million square feet, with more than 1,250 projects completed and 400+ ongoing projects in the country.

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