Local construction firms grow from strength to strength

Local contractors in Bangladesh are increasingly coming of age as they show strengths in terms of timely-delivery of projects as well as playing a major part in mega-tasks implemented by foreign firms, according to industry professionals.

"We are more self-sufficient than in the past. We are able to carry out critical tasks now," says Mainuddin Monem, deputy managing director of Abdul Monem Limited, the country's leading construction firm. He says Bangladesh is more advanced than many countries in the region in the construction sector.

Ghulam M Alomgir, founder and chairman of Max Group, another top construction firm, echoes the same. He says there is no need to depend on foreign firms to implement small- to medium-sized construction projects such as roads and bridges.

The construction sector is playing an increasingly strong role in the economy amid continued urbanisation and an array of large infrastructure projects undertaken by the government. It is one of the 15 major sectors that contribute to the gross domestic product (GDP).

The sector posted 9.92 percent growth in 2017-18, up from 8.77 percent in the previous fiscal year, according to the state-run Bangladesh Bureau of Statistics (BBS). The sector's share to the GDP increased to 7.50 percent in the last fiscal year, which was 7.36 percent in 2016-17. The value of the economic activities in the sector was Tk 73,595 crore in the last fiscal year.

Some 3.43 million workers are now employed in the sector.

There are about 4,000 construction firms in the country, according to the Bangladesh Association of Construction Industry (BACI), a platform of contractors and engineers. Of them, 100 construction companies have the capacity to execute projects even in a foreign country, says BACI President Munir Uddin Ahmed.

But they are not currently looking for opportunities abroad as there are lots of opportunities at home amid an immense surge in demand for infrastructures such as bridges, roads, houses and factories, and this is unlikely to change in the near term.

Alomgir says, in line with the fast-growing economy of the last 15 years, the country's capacity has grown so much that apart from projects such as the Padma Multipurpose Bridge, Bangladesh's contractors are skilled enough to implement small- and medium-sized bridge projects. He says most of the projects being implemented by foreign contractors are being delayed to a great extent—sometime seven years are being taken in place of three. On the other hand, projects that are being executed by local companies are not subject to such long delays.

Max Group has completed the engineering, procurement and construction of combined cycle power plants, for the first time in Bangladesh.

Russian state-run firm Atomstroyexport, the contractor of Rooppur Nuclear Power Plant, has recently awarded the work of completing the critical civil and erection works of the main turbine hall building of the plant to Bangladeshi company Max Infrastructure Ltd, a concern of Max Group.

"This is a matter of pride for Bangladesh," Alomgir says.

In this scenario, contractors say that the government should protect local contractors.

"Countries that grow strongly protect local contractors through domestic preference," says Alomgir.

 "The country doesn't lose if it gives domestic preference because jobs are created, technologies are brought in and profits remain in the country."

Monem says the government has given a thrust on infrastructure development under a very good master plan. A lot of work is being done. At the same time, a lot of work has to be done.

"Prospects for the construction sector are very bright."

The testimony of Monem Construction could be found in various infrastructure development projects such as the four-lane Dhaka-Chittagong highway, access road to Bangabandhu Bridge over the Jamuna river and Osmani International Airport in Sylhet.

It has constructed the approach road of the Padma Bridge and is currently involved in six major projects such as the Dhaka Metro Project and the Padma Approach Extension.  

Monem says Bangladesh will have to increase its strength in terms of project design. The country should also engage non-resident Bangladeshis who have talents and expertise in the area. 

There is a lot of investment in the construction sector and it will go up further if the government works strategically, he says. 

Ahmed of the BACI says that in the past when foreign firms used to build large bridges and infrastructure projects in Bangladesh, they would bring equipment from outside of the country. But most of the equipment now being used in the projects being implemented by foreign firms are being supplied by local firms, he says.

Ahmed's company Star Delta Engineers Ltd worked in the export processing zones and is also working in the Metro Rail Project and the Padma Bridge Project.

Local firms are contributing significantly to the mega-projects now being implemented, says Kamruzzaman Kamal, director for marketing at Pran-RFL Group, which owns Property Development Ltd, one of the oldest construction firms in the country.

The physical work is largely being done by local firms, labour, engineers, and technology under the supervision of foreign firms, he says. 

Property Development Ltd was involved in the Dhaka-Mawa road project and the Cox's Bazar to Bandarban road project.

"There will be huge activity in the construction sector for the next five years," says Kamal.