The Planning Commission,
Government of India along with the Construction Industry has set up Construction Industry Development Council (CIDC) to initiate activities for the development of the Indian Construction Industry. Hon'ble Deputy Chairman, Planning Commission is the Patron and Dr. Uddesh Kohli is the Chairman of CIDC. The Council started functioning in full swing from August 1996 and has taken up several important projects related to several vital issues of concern.

A notable few are : -

Standardizing contract conditions for Domestic Bidding Documents.
Computation and publication of Construction Cost Indices.
Human Resource Development.
Training & certification of construction workers & supervisors.
Diploma programme in Civil and Electrical & Mechanical Engineering - for Army Jawans.
Vocational & job-oriented training for the secondary level students.
Setting up Arbitration & Dispute Resolution Centre for construction contracts (for details see
Issues related to financing in Construction Industry.
Development & implementation of Grading of construction entities.
Networking with National and International construction bodies.
Establishing a Construction Equipment Bank.
Insurance products for construction projects.
Development of Harmonized Eligibility Criteria for Lending to Construction Entities.

Standardizing Contract Conditions for Domestic Bidding Documents:

  • Considering the long felt need for a review of contract clauses incorporated by Government agencies in their prescribed Standard Bidding Documents for construction works, the Chairman, CIDC set up a Committee in July 1996 for standardisation and rationalisation of contract documents for domestic bidding. The committee, chaired by Shri Harish Chandra, former DG, CPWD, and Member UPSC, with senior level representation from the Ministry of Finance, all major construction departments of the Government, important PSUs and an equal number of private sector agencies, deliberated and reached a consensus and laid down 12 Core Clauses for bidding documents. Further, based on these core clauses, a model contract document was prepared and termed as “Standard General Conditions for Domestic Contracts”.

  • The Ministry of Statistics & Programme Implementation, Govt. of India, has approved the documents and has recommended that it should be used as a model guideline for preparing and awarding contracts for civil engineering works all over the country.


Computation and publication of Construction Cost Indices(CCI). Also to develop other economic indicators specific to the construction industry:

  • The Construction Industry represents different sectors of operations and geographical regions. Each of the sectors and regions are unique and therefore a need for comprehensive price indices encompassing the diversities was strongly felt for a long time. CIDC, therefore, constituted a Committee of Experts to deliberate on the issue. A methodology for computation of CCI was finalized and CIDC has been computing CCI for 11 sectors and six cities since 1998.

  • Other economic pointers, such as per capita expenditure on construction, are being computed by CIDC.


Human Resource Development :

  • Training & certification of construction workers & supervisors: Requirements are enormous and obstacles many. For example, construction workers are seasonal, migrant and itinerant. Their place of work, project and their employers, all keep changing. They are in an unorganized sector. Employers seldom invest in their training, workers cannot sacrifice their earning time for attending courses, training centres are non-existent and so on. Recognising these problems, CIDC has initiated an ambitious project jointly with IGNOU. CIDC – IGNOU Scheme has the following features:

    • On-the-job training, minimum loss of earning.

    • Conveniently packaged programmes and credit system.

    • Uniform syllabi and standards of competence as per construction industry requirements.

    • Modern “ delivery technology “ being designed by IGNOU.

    • Objective testing by a Board which includes practising professionals as well as trainers / educators.

    • Training and Testing logistics provided by existing institutions / industry. They may become regional Constituent Institutions (CIs) or their Partner Institutions (PIs) under the scheme.

    • Employers are persuaded to meet the testing and certification expenses and also assure increments and/or promotion to certified tradesmen. They can also use them as instructors or demonstrators for improving the skills of other tradesmen of the same category who work alongside.

    • IGNOU certifications.

    • Scope for further education (diploma / degree level) for willing candidates who possess or acquire the basic education level.

  • CIDC has now been appointed by Director General of Employment & Training, Ministry of Labour & Employment, Govt. of India to certify skill of construction workers in 39 trades.

  • CIDC has also tied up with Dr. B. R. Ambedkar Open University (BRAOU) Hyderabad and Thapar Institute of Engineering and Technology (TIET), Patiala (Punjab) to provide academic support for its HRD Project.

  • CIDC has established about 19 institutes, throughout the country, for training and certification of construction workers in various trades. Regular examinations are being held in these institutes and certificates are being awarded to the successful candidates.

  • Recognizing the need to boost the training programs in the country, specially those being conducted by CIDC, National Highway Authority of India (NHAI) has made it mandatory to employ 5% trained and certified workers for its projects. Similar encouragement by other Government Departments will give a big boost to the training programs.

  • Diploma Programmes in Civil, Electrical, and Mechanical Engineering for Army Jawans : Consequent to the signing of the Agreement between CIDC & IGNOU on 18th July, 2003, Diploma Programs in Civil / Electrical & Mechanical Engineering are being offered for Indian Army personal on full time basis, of two and a half year duration (5 semesters). As a start up, the programmes are offered to Indian Army but would subsequently be extended to the civil sector also.

  • Vocational & job oriented training for the secondary level students : This programme has been launched to educate students about few basics of construction and to generate interest, so that they can opt for construction as a career in their future. This programme will also improve the general awareness of school students on construction activities and enable them to become self-sufficient to understand the importance and requirements in day-to- day maintenance work at home.


Setting up of Arbitration and Dispute resolution Centre for Construction Contracts :

  • CIDC has constituted a Committee for Arbitration and Dispute Resolution in construction contracts under the Chairmanship of Shri O. P. Goel, former Director General, CPWD to look into this vital issue and to establish an enabling mechanism.

  • In line with the recommendations of the committee CIDC has entered into an agreement with Singapore International Arbitration Centre (SIAC), to set up the CIDC-SIAC Arbitration Centre in India. The same has now been established (for details please see:


Issues related to financing in Construction Industry:

  • The construction sector remains in need of financial support while sizable funds available with Banks / Financial Institutions remain unutilised. Lenders do not have a reasonably sound and reliable system for risk assessment in the construction sector.

  • To address the concerns of the lenders, CIDC commenced a series of initiatives, most of which have already been implemented. The CIDC-ICRA grading system provides accurate assessment of the risk profiles of the projects and the agencies. Lender’s Engineer Panel provides a pool of specialized agencies / personnel for monitoring funds application and ongoing assessment during the lifetime of the projects. Insurance products, proposed by CIDC cover risks that are specific to the Construction Industry.

  • Oriental Bank of Commerce and Punjab National Bank have adopted the lending norms and the eligibility criteria proposed by the Finance Committee constituted by CIDC, and more Banks are in a process of adopting these.


Development and Implementation of Grading System :

  • This has a direct relationship withConstruction Financing. Banks and Financial Institutions have been in search of a reliable, objective and comprehensive methodology for their assessing lending risks. Other Construction entities (Owners, Consultants, Contractors) also require a comprehensive, objective and reliable instrument for assessment in order to forecast the chances of success of a project. Insurance companies too will find a reliable risk assessment system very useful for designing new types of risk covers for the construction industry.

  • In order to develop such an instrument, CIDC has joined hands with Investment Information and Credit Rating Agency (ICRA).

  • The new system is comprehensive and elaborate. It takes into account every major factor that has a bearing on the success of a construction venture. The system also covers all entities concerned, viz., the contractor, the owner, the consultant and the project.

  • Several construction entities have got themselves graded under this scheme. For details please see the “Grading Watch” section of this website.


Networking with National and International Construction Bodies :

  • Networking and co-operation with parallel foreign organisations has been initiated and fruitful relationships have been developed with Ministries of Japan , Singapore, Malaysia and other Ministerial Organizations of South East Asia.

  • The WTO regime is presenting new opportunities and challenges. Acceptability & employability of Indian technical Professionals hinges upon harmonized contents – both in Training & in Practice. CIDC’s efforts to help establish Engineering Council of India, under the auspices of Planning Commission, Ministries of HRD & Commerce together with Industry and Academic bodies, is a firm step towards accomplishing this objective.


Establishing of a Construction Equipment Bank :

  • A major chunk of construction equipment owned by companies remains unutilised for large parts of the year. The idle equipment requires maintenance. Depreciation adds further to the unproductive costs of the company. Wtith total equipment stock of over Rs 75,000 crores in the country & with additional requirements of Rs 9000 crores every year, efficient utilization of construction equipment will result in huge savings for a capital starved economy.

  • CIDC’s concept of Construction Equipment Bank is a reality now. CIDC has prepared general guidelines for the establishment of Construction Equipment Bank(s). The first such Bank has already started functioning in the name of Indian Infrastructure Equipment Trust Ltd.


Development of Insurance Cover / Instruments for Construction Sector Projects:

  • CIDC and the Actuarial Society of India signed a Memorandum of Understanding to develop as set of Insurance products for the construction industry. This is expected to facilitate easy credit to the risk-prone construction industry.

  • Business risks in construction are somewhat greater than in most other business ventures. The insurance sector in India has not yet recognized the scope of operating in this sector. Only three policies are available (Plant and Machinery Policy, All risk Policy and Workmen’s Compensation Act Policy). CIDC has proposed 10 new insurance products as an immediate requirement.


Development of RBI approved Harmonized Eligibility Criteria for Lending to Construction Entities:

  • CIDC has constituted a Financing Committee, comprising of HUDCO, IDBI, IBA, State Bank of India and the representatives of Construction Industry to work out a harmonized eligibility criteria for lending to construction entities. These criteria have been laid down and recommended for implementation. Several banks have announced implementation of these criteria for enhancement of lending to construction. Further detailing in terms of the following issues is being discussed as a follow up measure:

    • Bank Guarantee Costs.

    • Fund based support systems to construction organizations.

    • Working capital.

    • Soft lending for modernization of construction.

    In April, 2002, RBI issued guidelines for removal of cap on lending to Construction Industry with the provision of the above mentioned lending norms.

  • Thus begins a new phase in which the acceptability of Construction Sector as borrowers has improved substantially.


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