MODULE 3

BUILDING INDUSTRY

By Group 3 (A Sec)
Ambika
Amrutha
Ananya Chandra
Apoorva
Bhavana
Hima Shwetha
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GENERAL OVERVIEW
The Building Industry division includes units engaged in the construction of buildings and other
structures, additions, alterations, reconstruction, installation, maintenance and repairs of buildings and
other structures. Within this industry division, the major sub industries and industry groups are
construction services, residential building construction and non-residential building construction.

There are mainly three segments in the construction/ building industry like:
● Real estate construction which includes residential and commercial construction.
● Infrastructure building which includes roads, railways, power etc; and industrial construction that
consists of oil and gas refineries, pipelines, textiles etc.
● Construction Services: Residential, Non-Residential and Construction Services.

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VARIOUS PLAYERS OF THE BUILDING INDUSTRY
Government
•involved in policy making, legislation and promoting industry and financial guidelines towards industry.
•Controlling prices of basic materials like steel and cement.
Industry:
•Material manufacturers, cement, steel , chemicals , semi finished and fully finished materials.
•Quarrying activities – stone, sand and others like forestry.
•Machinery and tools , construction equipments , jcb’s, trucks, cranes etc . Hence the industry is involved in
primary and secondary sector as a provider; further in tertiary sector as a service provider.
Finance:
•As a policy construction industry still does not receive easy finance for investment as a capital. Only large
scale industries like steel and cement receive governmental consideration.
Labour:
•highly skilled, semi skilled and unskilled labour constitute the sector.
•Professional with high skills. Like degree/diploma qualifications semiskilled with industrial diploma/ ITI
training and unskilled labour without skills form the part of industry.
Statutory controls
• Various bodies, like government, local bodies, different board control and enforce various measures to
guide the industries 3
STATUTORY CONTROLS
Government policies and legislation:
● For example, minimum wages act, workman compensation act, industry act, labour acts, Women and
children employment (all labour related acts).
● Others acts relate to control of pollution (air, water ,noise.) Environment impact assessment act related
specially large housing projects and housing projects close to water bodies etc.

Construction Procedures:
● Guidelines by NBC ,CPWD, state PWDs and BIS .
● Many PSUS and private organizations follow their own procedures.

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ENFORCEMENT ISSUES
Enforcement issues to related to building industry relate to:
● Products And Standards By Bis, By Cpwd And Pwds Regarding Construction Processes And Execution.
● Further, third-party evaluation during execution apart from quality control cells in all organisations
helps in effective execution.
● Organisation like bodies ,for example, bda/(development authorities), corporations , municipalities ,
and gram panchayats through their own bye laws control quality of construction at different scales–
pollution related , located of industry, etc.
● Through not directly connected , but equally important are pollution –related issues related to
manufacturing of cement , aluminium,asbestos,even bricks kilns and mining stone quarrying etc,affect
the industry’s prospects.

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ARCHITECT’S ROLE IN BUILDING INDUSTRY
Architect’s role has been to limited to designing buildings in general, however today opportunities have
increased in diverse fields.
Government Level:
Architect can contribute through his Association i.e. is Indian Institute of Architect's(IIA) at national & local
levels to formulate public issues for e.g.:Housing & Slum Redevelopment, Earthquake rehabilitation
schemes/disaster mitigation workS, Housing policy ,changes in rules & regulations to the current legislation
can build-up public opinion through articles.
Industry:
Architect has opportunities to become entrepreneur beyond his profession & he can innovate in products &
processes, patent them & either ask industry to manufacture or architect himself can manufacture.
•He can suggest new products ,to improve building design & efficiency to the industry to take up the
manufacturing.
•He can design where energy /Green Building ideas are consciously, where efficiency of use is enhanced
over the lifetime of the building or Cost effectiveness of design is increased. 6
ARCHITECT’S ROLE IN BUILDING INDUSTRY
Finance:
Architect is directly involved in reduction of costs in design not only in choice of materials nut also methods of
Construction & Labour friendly & appropriate use of machinery.
Reduction in cost at planning, designing, execution & post execution maintenance through design measures
are essential.
Labour:
Architect design to plan to use of Labour- Skilled & semi skilled appropriately to save cost & for efficient work
production ,however a good balance of Labour & machinery needs to be planned in our country like India.
Statutory Controls:
Architect can contribute in substantially in areas like Environment Conservation by not only adopting them &
also increasing the efficiency. For example, Drawing attention of enforcement agencies like CPWD, PWD or
local bodies to more efficient practices in design & execution & fine tuning of wind solar energy, recycling of
water at residential /neighborhood level should be made part of enforcement .
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CONTRACTOR’S ROLE IN BUILDING INDUSTRY
● Building contractors are individuals with demanding and multi-faceted duties and responsibilities. This
individual has a job that entails hard work and thorough review of many processes which accompany
the building of structures.

● The building contractor is the individual who oversees the construction and ensures that all necessary
measures are taken to result in the completed finished product.

● The general responsibilities of a building contractor entail the individual planning and carrying through
any and all pertinent activities relating to the construction of a dwelling, building or other structure.

The building contractor carries out his/her duties by :

● Supervising employees
● Planning how the project will be carried out
● Completing the project in a manner which coincides with all laws, rules and regulations which may be
in existence and correlate with construction.

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EMPLOYER’S ROLE IN BUILDING INDUSTRY
The role of an employer in the building industry briefly includes:
● Hiring workers
● Application of working conditions
● Hiring and termination of employment notices
● Production of a monthly report
● Keeping a register of daily activities
● Updating the employer’s file
● Deciding the culture of the workplace.

Employers in property and construction require to hire:

● Architect for the design and planning of the project
● Contractor in order to manage the site
● Workers and labour favourably residing locally in the region
● Graduates in functions such as management, sales, marketing, finance and human resources (HR).

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TYPES OF INSURANCE NECESSARY DURING CONTRACT

Construction insurances can provide coverage for material, risks, natural disasters, employees, and even
your own business.

Types Of Insurance/Bonds

General Liability Coverage:

This type of insurance protects against injuries, accidents, or property damage suffered on the site.
Furthermore, construction workers can accidentally damage property mishandling materials and tools, or
while the remodeling process is underway, all these are covered under this insurance.

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 TYPES OF INSURANCE NECESSARY DURING CONTRACT

Worker’s Compensation Insurance :

Construction can prove dangerous, especially when the workers are handling power tools and heavy equipment. If an
employee gets injured on the site, the owner is responsible for providing worker’s compensation coverage. This type of
insurance pays for medical bills, lost wages, and other expenses related to an on-the site injury.

Commercial Automotive Insurance :

Contractors often drive large trucks and use other forms of heavy equipment which needs a dedicated commercial auto
insurance policy to cover those vehicles, whether the contractor drive them or put an employee behind the wheel.
However, make sure to keep personal and professional policies separate to limit your personal liability.

Surety Bonds :

A surety bond isn’t an insurance policy, exactly, but it provides similar protections. Instead of protecting clients from
damage and other on-site mishaps, however, it protects them in case the contractor is unable to complete the job. It can
also provide protections for subcontractors, vendors, suppliers, and other businesses with which one work. If one is unable
to pay for materials, for instance, the surety bond can make up the difference.
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 TYPES OF INSURANCE NECESSARY DURING CONTRACT

Asset Protection :
One can also buy insurance to protect the construction company’s assets. For instance, if one have special equipment like
generators, it insures against having to replace it on one’s own in the event of damage. One can also insure technological
equipment, such as computers and servers, that you might use during the course of business.

Performance bonds:
These are designed to ensure that the contractor delivers goods or performs services in accordance with the terms of the
contract.If the contractor fails to perform the contract, it is likely that the employer will suffer a loss, usually because of
delay or because the buyer is obliged to pay a higher price to acquire the goods or services elsewhere.

Advance payment bonds:

This manage the risk of the contractor’s failure to earn the whole of any
advance payment from the employer by failing to provide goods and services to an equivalent
value. The failure may result from the contractor’s insolvency, fraud or default through using
the advance payment for another purpose.Such bonds usually contain a reduction clause, whereby the amount of the bond
reduces in accordance with monthly certificates until the certified value of work done exceeds the advance payment.
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 TYPES OF INSURANCE NECESSARY DURING CONTRACT

Retention bonds :
Retention bonds cover the risk of the contractor’s failure to perform the contract. Retention money are normally
viewed as a security for the cost of rectifying defective works.

Off-site materials bond :

Off-site material bonds cover an employer against the risk of paying the contractor for materials being manufactured
off-site. If the contractor or sub-contractor becomes insolvent, the employer can claim on the bond for the amount of
the goods it has paid for in the event that the goods it has paid for are not delivered to site.

Bid bonds :
Bid bonds are used to compensate an employer if a contract has to be re-awarded because a prospective contractor
refuses to enter into the contract after his tender is accepted. Because the form of contract is likely to be unclear or
at least not to have been entered into at that stage, a conditional bond is unlikely to be appropriate.
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FIRE INSURANCE

● Fire insurance provides financial protections against loss by fire and other specified perils.
● Insurable properties for fire insurance are buildings, electrical installations, machinery, goods (raw
materials, semi-finished and finished) goods in open, contents in buildings (dwellings, shops, hotels,
furniture and fittings and pipelines inside and outside).
● Fire insurance is a contract to indemnify against the loss to the insured by an insurer against
payment (premium) during the insured time.
● Fire insurance cannot have a third party as both during the time of contract and loss. The insured is
to be directly involved.
● Insurer to be given notice of loss immediately, claim statement with all details to be submitted within
15 days time. Beyond 12 months, the insurer is not liable if the claim is not made earlier, expenses
towards architects, engineers and surveyors within 3% is excluded, expenditure on debris is upto 1%,
proximate cost clause to be fire and it should be accidental only, ignition-either goods or premises
and the loss should relate to policy subject matter.

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