The Hindu Business Line : ‘Skilled manpower needed’

Increasing the availability of skilled manpower and a long-term contract covering supply of components to BHEL are two issues that need to be immediately addressed to increase investments, says Rajappa Rajkumar, Chairman, Advisory Committee, BHEL Sma ll and Medium Industries Association.

Manpower shortage

There is a severe shortage of skilled manpower in the fabrication units and other small and medium industries that supply to BHEL. According to the association, every year over 600-1,000 skilled workers – especially welders – leave Tiruchi for better opportunities elsewhere. The industries have an ongoing training programme that barely manages to compensate for the numbers leaving and there is not much scope for expanding the training programme, according to Rajkumar.

A specialised welder earns more than Rs 1,000 a day and an ordinary welder about Rs 5,000 a month. But the units are not able to stop the attrition and worse, there is a lot of poaching within. The industries in and around Tiruchi need at least 5,000 workers more to meet the immediate needs. This can only be done through a massive programme that has to be supported by BHEL; the industries alone cannot manage it, he said.

Automation

The only other option to tackle manpower shortage is automation. This calls for increased investment, which is happening on a small scale. Last year an 18-member team went to China to check out the latest developments in pressure-welding. About half a dozen units are investing about Rs 2.5-3 crore in welding equipment and over Rs 3-5 crore in pressure parts welding.

But the crunch is that the suppliers are all entirely dependent on BHEL for orders. BHEL has to enter into long-term contracts with an escalation clause to ensure sufficient confidence among the suppliers for more of them to invest, Rajkumar said.

Transparent Contract

For now the suppliers are caught in a 18-month contract that runs up to September 2009. The escalation in cost of inputs and consumables is eating into the margins of the suppliers but BHEL is yet to consider any escalation. Over 30 per cent of the cost of conversion for the suppliers goes towards consumables, primarily the welding electrodes and wires, he said.

BHEL has to adopt a transparent costing methodology, and enter into three-year contracts with sufficient escalation costs, he said.

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