Govt’s assurance of fiscal support for infrastructure will boost equipment rental industry: Jitender Aggarwal, CMD, AGGCON
Construction Equipment Rental Industry set to touch USD 170.92 billion globally by 2029 at CAGR of 4.85 percent.
02 Aug 2024, New Delhi | Nirmesh Singh
With focus on infrastructure worldwide including India, construction equipment rental industry is set to grow in next five years.
According to Mordor Intelligence Industry Report, the infrastructure equipment rental industry is estimated at USD 134.88 billion in 2024, and is expected to reach USD 170.92 billion by 2029, growing at a CAGR of 4.85 percent during the forecast period (2024-2029) owing to the expanding construction industry, particularly in developing nations, due to several growth opportunities in residential, non-residential, and infrastructure industries.
The report says. there is an increase in the construction of multi-family houses (with the growing trend of nuclear families), along with increasing investments in the construction of expressways, bridges, metros, smart cities, highways, and roads, owing to increasing population and urbanization.
“Hence, the governments are increasing their spending on construction activities, which will likely drive the demand for construction equipment rental services”, the report added.
In India, the population is expected to be 1.64 billion by 2047, the year when the current PM Modi’s government is aiming to make India – “Viksit Bharat’. It is also estimated that 51 percent of India’s population is likely to be living in urban centres by then. With the rise in urban population, urbanization is expected to happen at a faster pace, creating a demand for urban housing and urban infrastructure.
Recently, PM Narendra Modi’s government has also reaffirmed its focus on infrastructure in this budget 2024-25 by allocating by allocating ₹11,11,111 crore for capital expenditure with an aim to achieve the goal of ‘Viksit Bharat’ by 2047.
In his conversation with The Rental Time on Budget, Jitender Aggarwal, Chairman & Managing Director, AGGCON Equipments International, a leading rental company in India, said, “This is vital for India’s economic growth. Moreover, govt’s assurance that it would maintain strong fiscal support for infrastructure over the next five years, will give impetus to the ongoing infrastructure projects and future projects”.
“This is encouraging for the growth of infrastructure sector and consequently boost the growth of infrastructure equipment rental industry”, he added.
“It will also lead to the growth of employment and entrepreneurship opportunities. However, there should be special schemes and support from government to encourage employment opportunities for women, particularly as equipment operators and maintenance engineers in rental industry to increase their participation in nation’s infrastructural progress”, he said further.
He also said, “I urge government to recognize infrastructure equipment rental sector and its contribution in India’s infrastructure development”.
Jitender Aggarwal also expressed concern over the poor quality of infrastructure projects especially the roads & highways as newly built roads have got severely damaged at many places during the ongoing monsoon rains across the country.
He said, “Government should review the policy of awarding the contracts to L1 as many times the L1 companies quote their prices much below the cost of project calculated by the government department itself. Government should understand the viability of project from the L1 contractor at such low prices, as this can compromise the quality of work”.
On Asia-Pacific region, the Mordor Intelligence report said, the region is also expected to witness significant growth because of the government’s increasing emphasis on developing infrastructure for a sustainable economy.
It also said, “This region has experienced growth in the number of Special Economic Zones (SEZs), hydroelectric projects, dams, highway constructions, metro construction, airports, etc., to sustain high-level industrial activities, growing energy demand, and better connectivity”.
“Considering the scenario, rental companies are making huge investments in fleet expansions, mergers, and capacity expansions”, the report added.
The Global Construction Equipment Rental Market is thriving, primarily due to the growing demand for construction across various sectors and the high costs associated with purchasing new machinery. Rentals offer a cost-effective alternative, with the market benefiting from advancements in technology that enhance machine efficiency.
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