Workers at production units have gone back home and are reluctant to return as coronavirus cases continue to stay on the rise
The sudden reduction in manpower due to workers going home during coronavirus (COVID-19) lockdown may impact the completion of Engineering, Procurement and Construction (EPC) projects by consumer durables firms. Sources told Moneycontrol that has been an almost 40-50 percent reduction in the personnel at manufacturing facilities.
“Even if we are ready to offer special incentives for returning to the production units, the workers are reluctant. This is going to especially impact the EPC projects driven by government orders,” said the head of finance at an electrical goods maker.
EPC projects refer primarily to orders given by the various state governments as well as the central government for areas like rural electrification, water treatment, industrial cooling, wiring and laying of optical fibre cables across the country.
It is estimated that almost 0.5 million workers are deployed especially for government-led projects across the country by the white goods firms. So far, 4.4 million workers have been ferried back home by Shramik Special trains that were organised by the railways amidst the Coronavirus pandemic.
The government projects constitute 30-40 percent of the topline of the electrical goods companies. Sudden spike in revenue orders also come from large orders from states like Bihar, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh among others.
Firms like Bajaj Electricals, Voltas, Polycab, Blue Star and Havells are involved in the EPC business.
“Payment delays have been a big issue. Now adding to that is the absence of workers. How will the projects be completed on time?” said the head of commercial businesses at a consumer durables firm.
On average, EPC projects take between nine months to two years for completion. Certain government projects in the area of electrification have shorter deadlines and hence a greater number of workers are deployed for completion within time.
Ever since the special trains for workers have restarted from May 1 by the Indian Railways, this personnel has gone back to their native states. With the threat of Coronavirus being higher in metro cities and its outskirts, workers have expressed apprehension over returning to project sites.
An added concern for workers was that there were payment delays by the consumer durables firms due to the government agencies delaying order payments.
The chief executive officer of a mid-size electrical goods and appliances firm said that since production was halted since March 25, these workers could not even be redeployed to other areas.
“Worker payments have been made but there was a delay across companies. Even though this is the source of livelihood for many workers and their families, the delays and COVID-19 threat has made them stay away,” said the Gujarat manufacturing head of a white goods firm.
The consumer durables firms are now planning to knock the doors of the respective state governments to help them attract workers from local areas for the manufacturing units.
