This refers to the article “Highway developers facing rising labour cost” (December 1). Highway developers themselves would have factored in future business repercussions and planned their financial strategies accordingly. Accordingly, their margin of profit would be substantial to ensure their long-term business stability and revenue inflow. All round economic development is a key factor in the laying down of government policies and developers cannot portray a one-sided view that labour costs are increasing hampering their functioning.
Further, in an environment of intensive mechanisation, even skilled labour has lost its relevance in many areas. An additional increase in capital expenditure for mechanisation will be of long-term benefit to the developer as his activity is an ongoing one. Once again, short-term contracts will be beneficial only when the quality of output at least matches the level of investment or else it will not be cost-effective. This will also result in a fall in the company’s market image that may hamper execution of future long-term contracts. It is only when this aspect is taken into account that the long-term investment will have relevance.
C Gopinath Nair Kochi
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