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Contract abandonment, delays hurt tower cranes market

By Chinedum Uwaegbulam
20 June 2022   |   2:49 am
Nigeria's tower crane market is witnessing one of its worst moments, with the economy nose-diving and top-notch projects being delayed or abandoned.

President, of the Nigerian Institute of Quantity Surveyors (NIQS), Olayemi Shonubi

Nigeria’s tower crane market is witnessing one of its worst moments, with the economy nose-diving and top-notch projects being delayed or abandoned.

The situation has created a hard time for dealers and importers of the construction equipment. The Guardian learnt the market in Nigeria is still underdeveloped compared to Dubai and London. For instance, the tower crane count in Lagos is about 100, while in Abuja, it’s not more than 60 cranes.

Globally, the tower cranes market was valued at $5 billion in 2020 and is expected to reach $7 billion by 2026, registering a compound yearly growth rate (CAGR) of six per cent during the forecast period.

It was learnt that the COVID-19 pandemic had a negative impact on the market due to the stringent lockdown and social distancing norms set across the world. Amid the lockdown situation, construction activities across the majority of the countries were halted, which in turn, hampered the demand for tower cranes.

Also, with the restriction on global transport, heavy-duty tower cranes commonly used in handling port cargo, also lost demand in the market in 2020.

According to the report, the global tower crane market is growing due to increased urbanisation, tower cranes’ outstanding stability and increased investment in renewable energy development. The surge in demand for prefabricated buildings to be erected on construction sites, due to the faster construction completion, is another major area that requires heavy-duty construction cranes, which is further expected to increase the demand for tower cranes.

The market is segmented by crane type lifting capacity (5T, 10T, 16T, 20T, and 25T), while the 5T and 10T lifting capacity cranes are expected to be the most used type in construction activity, due to the broad spectrum of uses these cranes can offer.

Also, most materials that need lifting from the crane fall under this category and have also led to these segments leading the market with about half of the total market share in 2020.

The availability of different designs for this lifting capacity category has attracted a lot of interest and attention from potential users and contractors of different agencies and countries. The increased demand for these machines in several sectors like energy, oil, and gas, and port-material handling requirements is another major advantage for this category of cranes.

Also, the high tip hoisting capacity offered by the 10T capacity cranes is an attractive characteristic for buyers looking for heavyweight hoisting up over huge heights

Besides, the lower emissions from these cranes and the ease of usage in terms of adding and removing the crane bars for the flexible height of the crane are other advantages.

Experts are divided on the use of the market to gauge the status of the economy. They said project abandonment and delay often affect the market.

The Chief Executive Officer, Height Access Limited, one of the equipment solutions companies, Mr. Harry Thomas-Odey, told The Guardian that there is no tower crane market in the country, adding, that what the country has is very insignificant.

According to him, the kind of development that uses cranes is serious construction projects and it portrays the low project developments.

He urged the government to provide enabling environment for the private sector to thrive, especially improving the ease of doing business in the country.

The President, of the Nigerian Institute of Quantity Surveyors (NIQS), Olayemi Shonubi, agreed with Thomas-Odey on the state of the market, saying, “the crane market in Nigeria is yet to be fully developed with very few companies holding sway as our needs for it has been rather low.

However, it’s hoped that by the time construction gets into full swing at the Eko Atlantic City, there will be an upsurge in the demand and use.

He stressed that the construction industry is not so well developed to adopt advanced technologies required for specialised and complex projects, which require cranes to work efficiently, counting the number of operational cranes may not necessarily give a good indication of the state of the industry and its contribution to the economy.

He explained that the construction companies ( or contractors) usually own(though some who cannot afford, hire) the cranes, while the costs for the period that the cranes are put to use on the projects are computed and charged to the projects under preliminaries or simply as part of the overheads on the project.

“For as long as the cranes are on site, the owners will have to pay the costs of having the cranes installed on their sites. However, where the project is suspended for any reason by the owner, the construction firm may be asked to remove the crane to avoid incurring the costs of keeping the same unused.

“In this case, the owner will have to pay for demobilisation and removal of the crane from the site. If subsequently construction work resumes, the owner will also have to pay for re-mobilisation and set up of the crane on the project site.”

For the President, of the Commonwealth Association of Surveying and Land Economy (CASLE), Joseph Ajanlekoko said: “While it could be generally be deduced that sight of tower cranes are evidence of construction activities, it definitely cannot be stated categorically that they are reflections of the state of the economy as more activities might be involved in roads and other heavy engineering works like the building of railway track, bridges and runways, which are more critical and far greater value to the country than the building of skyscrapers to ignite greater economic developments of a nation.”