Friday, March 30, 2012

EPC Services and Engineering Design Groups in India- Is there any HR crunch ?

I had earlier written a blog here highlighting the importance of engineering services departments for ensuring long term success of integrated steel plants of India. [You may read it Here !]

Engineering Services Departments (ESD) may be known in different names, but such a department is the key for ensuring success of capital project investments undertaken by the steel plants. Again success of the steel plants would invariably add to the economic progress of the country.

The same is applicable to other industries as well. For large process industries, existence of an ESD having a team of experienced and competent consulting engineers would be a great asset.

Some industries outsource the work of ESD to external engineering consultants. This is the only option for setting up a new industry. The following are some of the leading engineering consultancy service companies in India:

1. M. N. Dastur
3. Uhde
4. EIL
5. Tata Consulting Engineers
6. FP India
7. Fichtner India
9. Libra Process
10. Linde Engineering
11. CECON Consultants Pvt Limited

But once the industry has come in to existence, its in house ESD should be in a position to look after its future needs with regard to all additions, modifications, replacements and even modernizations.

But ESD's alone cannot guarantee success of any project involving Engineering, Procurement and Construction (EPC). While ESDs are responsible for drawing the outline of the project formulation and the project estimation from the purchaser's side, reputed EPC contractors having the core competency in undertaking the detailed engineering, procurement and construction of the project upto  its successful testing and commissioning are also essential to ensure the completion of the project successfully.

In India companies or firms having full fledged infrastructure in executing EPC contracts are limited in number. As a result, whenever massive infrastructure investments are taken up by a number of investors both in the private and public sector almost simultaneously the essential capacities of the EPC contractors with regard to expert man power and related infrastructure gets overburdened creating a bottleneck for speedy implementation of projects.

The reason for this is because of the haphazard planning by the authorities. You just cannot spend billions of rupees in one or two year's time if you do not have that many experienced people to execute the projects even when you think of outsourcing the contracts to foreign EPC contractors. EPC involves group efforts by many teams of experienced engineers in various levels and disciplines capable of doing works like surveying, development of basic and detailed engineering drawings, construction at site, equipment sourcing, inspection , erection, testing and other such activities.

In India expertize in the field of surveying, design and drawing, which is essential for any EPC contract to be successful, has not seen much advancement in the last many years commensurate with the requirements.

It takes years of work experience for engineers to develop expertize in this field. When you do not have EPC projects not taking place for decades at a stretch, there is no chance that those engineers who are placed with EPC related work are getting experience that is required to be gained. Again, lack of adequate work in this field has caused many organizations, both in public and private sector, to curtail the strength of engineers in this field or altogether redeploy them to other areas of work.

Thus during the period from 1990 to 2005, there has been a big slump in EPC related work in India in many sectors. Many EPC contract companies who used to have a good name in the past have just got vanished from the scenes.

Later when decisions are taken for massive spending in EPC contracts, the purchasers are left with no option other than awarding contracts to any one without actually ascertaining their capacities to do the work in time. Even those who have managed to get contracts are running here and there in search of experienced engineers to do the job. Those who took voluntary retirements from the sinking organisations of yester years are in great demand now.

But those who think that such engineers would be of some help in doing the work might not be knowing fully well about the complexities of the work done by an experienced team of engineers.

An individual engineer, even when he is experienced would be a helpless person unless he has got the backup support system by way of his peers , subordinates and others who used to be his strength. Besides, in a new place he is without his back up knowledge !

There are a few EPC contractors who are surviving the slump of the last decade and are perhaps doing well now. Now the time is good for them as there are plenty of orders and opportunities. Their order books should be full.

Some of the leading Indian EPC firms are :
1. Larsen and Toubro
2. Punj Lloyd
3. Jaypee Associates
4. Lanco Infratech
5. Nagarjuna Constructions
7. Simplex Infrastructure
9. Gammon India
11.Tata Projects
12. Shapoorji Pallonji
13. GVK
14. Siemens 
15. MECON (Public Sector)
17. EIL (Public Sector)
Whether it is an in-house ESD of a large industry or an engineering consultancy service company or an EPC service firm their efficacy and success depends on their ability to retain and develop engineering talent and expertise especially in the engineering design and consultancy field. This is indeed a difficult human resource development (HRD) task.

In engineering design and consultancy field every engineer from each of the specialized field of engineering discipline has to be with exemplary professional skills and knowledge. Without which the group cannot accomplish the challenges posed to it. Without having a steady inflow of assignments the group cannot gain experience. The group cannot expand to have more engineers to its fold, unless it has an assured income coming from engineering design and consultancy works.

EPC and engineering consultancy groups face this dilemma: to expand in manpower or not. Haphazard developments plans of the country is the biggest problem in this regard. EPC and consultancy groups are often compelled to play safe. They keep the man power at the minimum. Some consultancy companies that had grown too big in man power due to the work loads in the past decades had to adopt various means such as voluntary retirements to reduce its man power when work inputs reduced. This way a good chunk of their expertise in various areas got removed. Later when investment momentum began picking up, they faced human resource crunch which had its own effects in the quality of their engineering expertise and services. I would not like to name those groups because their managements officially would not like to highlight such drawbacks for obvious reasons.

The human resource vacuum that happened in India in core engineering fields with regard to real engineering experience, in all industries both in the public and private sectors, is the main reason why India is facing cost and time overruns in almost all infrastructural and industrial projects.

As engineering is a group activity, it would be very difficult to identify the areas of competency vacuums that exist in the various organizational hierarchy by statistical studies.

To identify this we need to adopt a different approach. The top authorities should open their eyes to recognize the ground realities in this important area that is critical to the country's future developments if at all progress is to be achieved in a reasonable time frame.

An open discussion by the people who are working in this area of EPC and engineering consultancy fields might be helpful.

It would be an interesting study if some one undertakes to find out the number of engineers working in design and engineering field in India and the details of their qualifications, experience, age, expertize, etc. I percieve a human resource (HR) inadequacy in this field. There is also a need to make this area an interesting career option for young and bright engineers. If the field does not attract them, progress of India would depend on foreign help perennially for ever.
I may be wrong in my perceptions.

Please correct me if I am.


  1. Replies
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    1. I am happy that someone from the Besten responded to the blog with a link to their website. While appreciating the fact that there are many such newer firms trying to establish their footprint in this field, there exist difficulties with regard to HR. This was the point made in my blog. A response on this aspect would be appreciable.

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  4. Myself param saharan an electrical engineer and running my firm for contracts of HT AND LT line but am soooo excited to learn EPC and want to open my own firm in this field but in delhi or india no one center is available .Please help me .

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  5. EPC / ESD & Infrastructure Companies & other govt. bodies therefore must come out in the open and promote career prospects in these Industries and if possible embark on scholarship projects where they nurture talent from the college portals. Currently,in the absence of any visibility of such campaigns, the young grads make the obvious choices to IT & other fields but the ones in discussion here. Hope at least some are hearing...

  6. nice article...with engineering you can do other distance courses- and if you join phd program and Ph.d in India then you can get a good position in your company. so please make a highly educated professional...

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  10. Hi.srinath here .I am a mechanical engineer with an adv pg in piping design and layout engg.Looking for jobs.finding it really difficult yo gt a job as a fresher.

    1. It is quite unfortunate that you with a PG in the said specialization is finding difficulty for a job suiting to your skill and training. Your specialization is very valuable in the EPC field.

      However, in India, both in the private sector and public sector, regrettably, it is not the engineers, responsible for a field of engineering service, who decide whom to be selected for a job. It is most often by people who understand the intricacies of the job the least. Unlike in the developed nations and perhaps also for the jobs in the software field (which again are being done for the westerners), in India placements decisions are done arbitrarily and mechanically with no serious thoughts of a person's suitability and background knowledge for a particular job. Even when engineers are selected, they are often placed for jobs that are not related to their initial training or acquired experience.

      This is exactly the reason why India depends mostly on foreign engineering service firms (called technology suppliers by the top fellows who do not have the knowledge to differentiate between technology and normal engineering design) for many projects involving conventional engineering designs. Unfortunately, neither our politicians nor our bureaucrats are capable of realizing this and make any changes in the engineering profession which is placed at a very disadvantageous situation as compared to the developed nations. Over the years, India has also lost visionary engineering leadership who could be of some help in this context. What we have today is a group who are too obliged to please the bureaucracy and the politico-cracy.

  11. Sir your blog is very helpful, got some insights.I am currently making a project on Problem of Talent Management in EPC Sector.

    1. All the Best Wishes for your research work. Let us hope your conclusions would be of some help to those concerned with HR planning in the EPC sector.

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