As on date the group has its business units at:More
LENDER`S ENGINEER (LE) is a representative of lending institutions such as banks and NBFCs. His function is to audit a project from the technical standpoint when a developer seeks funding for it. This is a process which risk/compliance teams have, over time, hard-wired into funding proposals by developers. The obvious intention behind this requirement is to identify, mitigate and hedge the lending institution’s risks with regards to the technical aspects of construction.
The key risks include:
The requirement of a Lender’s Engineer is a factor of the risk and compliance parameters of individual lending institutions. To safeguard the interests of all concerned, lenders have to ensure that the appointed LE has performed a sufficiently detailed review, provided the correct information and reviewed all the construction risks.
Meanwhile, there is a recurring question in the minds of developers - what is the value they derive from paying for a lenders engineer? Is the mandatory rubber stamp all that they can expect? The fact is that they can - and should - derive a lot more value than this from such professional services.
A knowledgeable, involved and neutral Lender Engineer can bring tangible and definite advantages that go beyond the stamp of approval to the developer`s table. The benefits of such a LE`s services in terms of project monitoring are, in fact, not limited to providing security to lending institutions - they are also an important component of risk management and value addition for the developer himself. Backed by sound technical knowledge, the LE plays a vital role in overall project monitoring and coordination by providing steady technical feedback. These inputs can help developers to present a more accurate and convincing picture of the project`s progress at construction control meetings. Also, these expert inputs can help reduce the chances of project failures due to:
A professional project development and monitoring agency brings in best practices on processes which developers might not have adopted yet, and increased efficiency in the development process will always lead to a better product. Also, proactive identification of risks can lead to better planning / early value engineering, which can subsequently lead to savings upto 10% on the project costs. It is recommended for lenders to involve a LE at the pre-investment stage, since this will ensure that risks like labour availability, uncovered project costs and overall specification and project cost can be identified in time. This is particularly relevant in light of the fact that new construction technologies are emerging constantly. Both the lending institution and the project developers must aware of these technologies and the cost benefit analysis before they can be leveraged for a more efficient project development. Social factors like environmental, health and safety practices are factors which require far greater emphasis than they are currently being accorded in the Indian construction industry. Only a neutral, qualified person whose concerns extend beyond mere time and cost savings can provide impartial guidance on these concerns. In these areas, the LE can by virtue of his function and expertise - is in a position to provide inputs that can have a significant impact. To illustrate - in the case of a large residential construction, a LE helped a major developer to manage labour attrition by providing value-adding facilities such as on-site crèche and medical aid centre.
© 2014. All rights reserved. Powered by REEHAL WORLD