Why are fire accidents occurring with impunity and what does it say of the prospects of the fire safety industry?
Of late, fire accidents are being reported with unfailing regularity and are forgotten by all of us immediately. Major accidents such as Uphaar fire tragedy in Delhi or Kumbakonam school fire in Tamil Nadu or AMRI hospital fire in West Bengal or the Carlton Towers fire accident in Bengaluru are grim reminders that fire safety is still not given the importance that it deserves.
The retail explosion in India and the growth of the real estate sector in the last few years has directly created a need and awareness for fire safetyand security surveillance. Despite this growth, why are fire accidents occurring with impunity and what does it say of the prospects of the fire safety industry?
Unfortunately, people view fire safety in the same way as they would view insurance. Fire safety is considered as a means for obtaining a no-objection certificate, which is a must for obtaining a building permit. Either the fire safety installations are not done in a professional manner or are poorly maintained. Also, the NBC (National Building Code) hasn’t been updated since 2005—despite the fact that so many accidents have resulted due to gross violation of the code.
V Nagesh Rao, a fire safety expert, rues that maintenance of fire safety systems is not up to the mark in India. He says that gross violation of the building codes for maintaining fire safety go unnoticed. “What is the point of investigating a lapse on part of the promoter when so many lives have already been lost?” he asks. More so, when no one wants to learn lessons from such tragedies.
R Prasanna, a national sales head in a security firm, says that the awareness about the fire fighting industry in India is gradually increasing. “If you look at Bengaluru, the growth of the city as a “Silicon Valley” directly boosted the prospects of the fire safety sector. IT, IT-enabled services, retail boom and massive real estate growth in Bengaluru all of these contributed to the growth of the fire safety industry. But when the prospects of real estate sector plummeted, it had a direct impact on the fire safetyindustry.”
Adds Prashant Desai, a fire safety systems designer says, “Many of the MNCs which occupied offices in Bengaluru insisted on fire safety systemscomparable to international standards. This forced the strong impetus for installation of fire safety systems as per international design standards.”
But despite the construction boom, why is it that the fire safety industry is not growing as expected? M Prabhu, marketing manager in a fire safetyfirm, says, “The 2008 recession had a terrible impact on the fire safetysector—the collateral damage to this industry due to a slump in the real estate sector resulted in many builders and developers not honouring their payment dues to the system integrators. Some builders abandoned their projects half-way and also did not pay the contractors for the work that they had completed. The sad fact is that the growth of fire safety industry is cyclical.”
As if this wasn’t enough, unorganized players with little experience have given the industry a bad name. “People who sell fire extinguishers have masqueraded as system integrators and have ended up botching the credibility of the sector”, adds Mr Desai. Worst is when some electrical contractors are assigned the job of fire safety despite the lack of competence.
Mr Prasanna says, “System integrators are realizing that spreading business into different verticals is the way to sustainability and long-term growth. For example fire safety in the infrastructure sector pays rich dividends as these are mostly lump sum contracts. In the infrastructure sector, fire safety is an absolute necessity. A threshold of the contract value is agreed upon and it is the system integrator’s ingenuity to complete the project at a cost much less than the contract value to generate higher margins. Focusing only on the real estate sector exposes contractors to the vagaries of the fortunes of the real estate sector”. Bengaluru-based security consultant Anantharaman (who works with ABB as quality and safety advisor) says that focusing on the hospitality and hospital sector besides infrastructure projects will help the fire safetybusiness maintain an even keel.
What then are the critical success factors for a successful business model? Alok Mitra, a security expert says that the industry needs to be more professional in its approach. “A project-based approach using fundamental scientific techniques of project management is a must. Thefire safety industry thrives on relationships nurtured with clients over time. Successfully completed projects act as brand ambassadors for winning future projects”.
Mohit Nagaiah who works as a sales manager in a fire safety firm says “In today’s world, customers appreciate system integrators providing value engineering—how can we provide more value at a lesser price. Clients are opening up to innovative suggestions from our system designers and that is actually helping the business”. Adds Mr Desai, “Today system integrators and clients have to work together to arrive at solutions. Clients do appreciate if their suggestions are not accepted due to scientificreasoning. Rework in the later stages of the project can prove to be costly”
Who will then provide fire safety systems to the real estate sector? Mr Mitra says, “Many builders delay our payments citing silly reasons. There are clients who come up with a big snag list when it comes to releasing our payments. This defeats the purpose of business partnership. On many occasions, our operations team does not receive clearance from the client side for executing piping work and this delays the project. But when it comes to releasing the payments, this delay is attributed to us. Yes, I agree that customers are important but so is the survival of our business. These things can’t be mutually exclusive, can they?” he questions. Extreme situations may need arbitration if the problem between the client and the contractor can’t be resolved amicably.
A Bengaluru-based developer thought that he could use his ingenuity to get the work done without paying up. This work of fire safety was to be completed in a multiplex that was to go operational shortly. The maintenance team landed at the multiplex and completed the work. But the developer started playing truant when it came to releasing the payment without realizing that the team had left parts of the work incomplete as they were not sure that their payments would be released. The moment this was highlighted to the developer’s office with a veiled threat to inform thechief fire officer, the developer’s team came running to make thepayments that were overdue for more than six months.
The clients need to give preference to quality of erection and not just go by the cost involved in setting up a fire safety system. What is cheaper need not always be the best. On their part, the service providers can negotiate with their product vendors to reduce the input costs and this cost saving can be passed off to the client on a mutual sharing basis.
Generally, the work involved in fire protection and detection can be completed in a reasonable period of time if all the resources are available. But this is where the problem is. The supply and erection advances are released against bank guarantees and later on, these monies are used to mobilise resources at the site. Material supplies follow and the subcontractors like civil, welding/fabrication, etc, start getting involved in the site activities.
As per the terms of contract, payments are released after supplies are made and erection bills are submitted as per the mutually agreed milestones. Delayed payments from clients have cascading impact. Two aspects of the project need focussed attention. One is material management and the other is the execution schedule. If these two aspects are managed well, then half the battle is won. But this is not possible without the support of the client or the PMC that acts as an intermediary between the system integrator and the client.
Embracing newer technologies to deal with newer dimensions of risks is very vital for survival in the market. If organizations are able to consolidate through strategic alliances without hurting employees’ career growth prospects, that itself is a major achievement. Ask the former employees of Chennai-based Agnees who were left high and dry when UTC took over the company. “But this is not unique to the fire safety industry. These sorts of issues are common whenever mergers occur, so why blame only the fire safety industry?” asks Mohit.
Decades ago, the word “fire safety” only conjured up images of fire stations, fire fighters and fire extinguishers. But the industry has now come a long way. Fire safety is increasingly gaining greater importance as an inherent part of any infrastructural set up. But it has still a long way to go.
Source:www.moneylife.in
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