MBA LM505 Final Thesis MGT6000-A Gura Goredo 1020488

7/31/2019 MBA LM505 Final Thesis MGT6000-A Gura Goredo 1020488

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UNIVERSITY OF MAURITIUS

Faculty of Law & Management

FOREIGNLABOURINTHE CONSTRUCTIONINDUSTRY

ACASE STUDYINACIVILENGINEERING COMPANYSPECIALISINGINTRENCHWORKS

Dissertation submitted as partial fulfilment of requirements leading to the award of a

MASTERS IN BUSINESS ADMINISTRATION

Akash GURA GOREDO

Student ID: 1020488

31 August 2012


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Acknowledgement

I wish to put on record my appreciation of Dr Deerajen Ramasawmy for his

understanding and patience in reviewing my draft at different stages.

I am also grateful to Sotravic Lte and its staff for having been kind enough to spare

some time to extract data and provide me with detailed data, often at very short notice,

but always with diligence. Mr Ruby Ranglall, Mr Thierry Nadal , Mr Radhakeesoon

and Mr Sailesh from Plaines Wilhems site offices were highly collaborative in all

respects, as well as Mr Varsally the Site Manager for having provided photographic

footage and feedback on preliminary study. At head office, Mr Navin Ghoorbin, Mr

Krishan Beessoon and Krishen Ittoo offered invaluable help at various stages of the data

analysis. My mentor Mr Jean-Marie Puran was also readily available to offer insightful

comments about the financial analysis.

Last but not least my heartfelt gratitude goes to my wife Kiran for having been my

prime inspiration and unfailing support throughout all the course duration.


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Abstract

The present study focuses on the case of Sotravic Limite, a trenching and pipe works

specialist, which banked on a newly awarded large-scale construction project for

growth. For this, Sotravic had to hire in sufficient numbers to be able to pursueexpansion of its site operations, but despite high unemployment rates in the country, its

attempts at attracting and recruiting locally remained unsuccessful and tried to hire

migrant workers from a few nearby countries before finally securing a continuous

stream of workers from India. This initiative allowed Sotravics construction activities

to be pursued at a larger scale. While focussing on growth no study was made to assess

whether this venture was worth the effort and if reliance on foreign labour can be

sustained.

After collating data about site operations over time and analysing these by comparing

productivity of local workers to foreign workers, it was found that the latter had higher

attendance rates than local counterparts, but that absenteeism among them would

increase significantly as soon as they were entitled to paid leaves. At site level, the

productivity level of foreign workers was found to be significantly higher than that of

local workers, especially in work items that required less intense physical effort such as

pipe laying and installation of plastic chambers also, this was achieved by a more

intensive use of support resources surrounding their main task. However, local workers

showed more dexterity in operating excavation equipment and concreting works,

resulting in higher productivity in these work items.

It can be concluded from the analysis that it is worthwhile to hire expatriate workers in

order to fill a demand gap in the short term and for specific, low-impact tasks such as

pipe laying and installation of inspection chambers.


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5.4.1 Excavation _______________________________________________________________ 48

5.4.2 Pipe work________________________________________________________________ 49

5.5 CONCRETE WORKS ___________________________________________________________ 52

6 CONCLUSION & RECOMMENDATIONS_________________________________________ 53

7 REFERENCES _________________________________________________________________ 56

8 APPENDIXCALCULATION RESULTS _________________________________________ 60

8.1 ATTENDANCE _______________________________________________________________ 60

8.2 HOUSE CONNECTION TRENCH WORKS____________________________________________ 60

8.2.1 110mm diameter uPVC pipes ________________________________________________ 60

8.2.2 160mm diameter uPVC pipes ________________________________________________ 62

8.2.3 House connections: pipes of all diameters ______________________________________ 64

8.2.4 Plastic IC450mm diameter________________________________________________ 65

8.2.5 Plastic IC600mm diameter________________________________________________ 67

8.2.6 Pre-Cast Reinforced Concrete IC450mm diameter_____________________________ 68

8.2.7 Pre-Cast Reinforced Concrete IC800mm diameter_____________________________ 69

8.3 STREET SEWER TRENCH WORKS ________________________________________________ 698.3.1 Excavationeffect of road width _____________________________________________ 70

8.3.2 Excavationeffect of trench depth ____________________________________________ 70

8.3.3 Pipe works _______________________________________________________________ 78

8.4 CONCRETE WORKS ___________________________________________________________ 79

9 ANNEXPHOTOGRAPHS ______________________________________________________ 82

10 ANNEXPLANNING GANTT CHART ___________________________________________ 83

11 ANNEXPROGRESS LOG______________________________________________________ 85


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1 IntroductionThe presence of foreign labourers has become a common feature in local manufacturing

companies since the early 1990s. However, this trend has been observed only recently

in the construction industry. Studies carried out until now have attributed the increase innumber of foreigners to the lack of local people both in numbers and with adequate skill

levels, while paradoxically, unemployment has been increasing. The trend in importing

labour started in the textile and jewellery industry as from the mid-1980s and

propagated to other sectors of the economy together with the growth of the economy.

The construction sector also jumped the bandwagon as from late 1990s and since then,

the number of expatriate manual labour has kept increasing.

Sotravic Limite is one of such construction companies which have recourse to the use

of migrant workers for sustaining their business activities and pursuing their aims of

expansion. Until 2008, it had managed successfully to rely on local labour only.

Retention and recruitment of skilled labour had been achieved by means of attractive

incentive schemes for both its internal labour force and its usual subcontractors. This

strategy had worked until then due to the relatively low volume of work which implied

that its recruitment effort for hiring additional labour for supplementing its core labour

did not require intensive means. However, due to a drastic increase in work volumes

since 2009, Sotravic has been constrained by an acute shortage in labour force and has

had to recruit massively from abroad.

The present study will aim at analysing productivity levels of migrant workers and to

determine whether the endeavour of hiring them is worthwhile, while taking due

consideration of the total costs of retaining them in employment over the limited time

frame available for each worker in Mauritius.


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2 Literature Review2.1 The PESTEL conditionsMigration for employment has been an increasingly important global phenomenon. A

study conducted on behalf of the World Bank (Ratha, et al, 2010) estimated the volume

of remittances sent back home by the 215 million of migrant workers worldwide to

USD 325 billion in 2010 (a 250% increase in eight years, from USD 130 billion in

2002) which is larger in volume than official aid flows and amounts up to 10% of the

GDP of some developing countries. This trend may be explained by analysing the

political, economical, social, technological, environmental and legal factors.

From the political point of view, the gradual but steady dismantling of trade barriers

through globalisation has encouraged the settlement of businesses beyond their

homeland in a view of minimising costs and thereby maximise profits (Hill, 2011). This

rationale prompted businesses to move geographically towards resources with the

lowest cost. When the Multifibre Agreement came into force allowing products

manufactured in the ACP countries to benefit from preferential access to European

markets numerous manufacturing companies migrated from Hong Kong to Mauritius in

the late 1970s. At the time Mauritius faced very high unemployment rates and the

political climate was unstable. With the advent of a relatively more stable government

in the aftermath of the 1983 elections however, new momentum was given to the

industrialisation of the country. Manufacturing industries were given a number of

incentives, mainly of fiscal nature, among which a 10-year tax holiday and unhindered

repatriation of profits, which were the principal motives to foreign investors to invest

massively in Mauritius. This resulted in an economic boom in the early 1980s. As a

consequence of investment in industrial production the local unemployment rates

(Kowlessur, 2004, citing Alter, 1991) and unemployment fell steadily from above

10% in the early 1980s to a historic low of 1.6% in 1994 (Mootyen, 1995).

The presence of foreign labour in the Mauritian economy dates back to this period.

There was labour with sufficient skill levels and in sufficient quantity as to satisfy the

demand pull exerted by the growing Mauritian manufacturing industry. However,

growth in manufacturing companies was constrained by a lack of manpower with more

advanced skills and in sufficient numbers (Kowlessur, 2004) as the economy and

demand grew in sophistication. Because of the gap in skill level and quantity local


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manufacturing companies resorted to hiring migrant workers. This trend would

principally supply the growing demand for highly skilled labour in the textile sector.

In 1989, the Ministry of Employment issued 1,800 work permits. The trend has

increased in pace over the recent years, as illustrated below, and the total foreign labour

force reached 33,000 as at January 2011 (The Independent Daily, 2011).

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Foreign workers employed in large establishments

Figure 1: Number of foreign workers employed in Mauritian large firms (Data: 1990 - 2010: Statistics

Mauritius; 2011: The Independent Daily (2011))

This sustained growth in demand for foreign labour has not always been due to lack of

lack of local labour. Indeed, though unemployment fell to record lows (less than 2%) in

the mid-1990s, it fluctuated widely in the following decade and rose again to 6.5% in

2011.


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7.2

7.7

8.4

9.6

9.1

8.5

7.27.3

7.87.9

3.9

4.7

8.98.8

9.7

2.5

2.9

6.5

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

%

Year

Unemployment rate,

%

Inflation rate, %

Figure 2: Unemployment rate and Inflation rate 2006 - 2011 (Statistics Mauritius, 2011)

Mootyen (1995) found that importing labour in the construction sector was justified in

the mid-1990s: while acutely lacking enough local labour, foreign workers were

generally more efficient than local workers. At the same level of production,

Mauritians received between 60% and 133% more than Indians receiving legal wage

rate this, despite the extra Rs45 daily meal allowance above all the mandatory per

capita guarantees, return air tickets, and other associated indirect costs.

The workers that are imported into Mauritius fall under Stalkers (2004: pp 4) category

of Contract Workers - people who are admitted on the understanding that they willwork for a limited period, whose priorities are different from those of settlers,

professionals, illegal immigrants or asylum seekers. This was confirmed by

study conducted by the Mauritius Research Council Industrial Strategies: A Study of

Gender, Migrant Labour in the EPZ (1999) which showed that most migrant workers

coming in Mauritius (mainly from China, India, Bangladesh Sri Lanka and Madagascar

until 2010 (Koonjee, 2010)) indicated that their prime motivation was that their income

so low in their homeland (Ramchurn, 2004) that they relied on their expectation of a

higher salary abroad (McKenzie, Gibson & Stillman, 2007) for sending remittances


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back to their families in the hope will improve their living conditions (Shaw / World

Bank, 2007)..

Shortly after the textile industry had experienced rapid expansion in the mid to late

1980s there was a spill-over effect to other sectors of the economy, and the

construction industry was in turn facing similar pressures to deliver the necessary

infrastructure over tight deadlines. This surge in demand for specialised labour

prompted local companies to turn to foreign labourers despite the surge in labour costs

that was anticipated from similar difficulties faced by the textile industry in the mid-

1990s (Coonjan, 1996). At the same time however, Mauritius accepted foreign

concessionary loans which implied that only foreign construction companies could to

execute public projects financed by their home countries. These contractors rapidly

settled in the local business environment and secured incorporation at the Registrar of

Companies. This trend signalled to local construction companies of higher opportunities

for large projects in the future, but only if they could compete with these foreign

contractors which practiced notoriously low wages.

The comparison with Mauritian workers soon became widespread: Mauritian

construction companies started hiring Chinese workers as from 2001, and their numbers

increased swiftly to reach up to more than half of the total manual workforce in some

local companies which were fuelled by the perception that foreign workers were more

productive than their Mauritian counterparts on construction sites.

The recourse to migrant workers often been held as an economic imperative (Naiko,

2006), whereby the competitiveness of the local manufacturing industry has been

reliant on the input of foreign workers for higher productivity and attendance even

during local holidays. That study highlighted that local employers were prone to blame

Mauritian workers for high absenteeism, reluctance to match the pace of theseforeigners, overtime work and shift hours, but none commented on Mauritians

experiences of unfavourable working conditions, unfairly low wage rates and low

motivation from the absence of scope for advancement.

On the legal aspect, driven by Governments strict rotation policy to avert settling of

migrant workers (like migrants in European countries in the 1960s (Shaw, 2007) there

are a number of legal pre-requisites to be fulfilled before work permits are delivered by

the Ministry of Labour for hiring migrant workers. These requirements have been laid

out in relation to the following legislation and conventions:


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- The ConstitutionThe Constitution, held as the Supreme law of the land, guarantees to every

individual in sections 3 and 13 the freedom of expression, of assembly, of

conscience, and association without any discrimination on the basis of sex, age,

place of origin, political opinion, colour, creed, race or sexual inclination. By virtue

of these sections, migrant workers are to be treated on par with local workers and

therefore have equal rights to form associations or trade unions. In practice

however, most employment contracts signed by the migrant workers are conditional

upon their refraining from engaging in collective bargaining.

Section 6 of the Constitution also protects individuals in Mauritius from slavery

and forced labour. However, all these liberties are conditional to these migrant

workers not settling down in Mauritius and them returning to their home countryafter the fulfilment or expiry of their employment contract.

- The Recruitment of Workers Act 1993The license to recruit abroad is subject to an application made to the Permanent

Secretary of the Ministry of Labour (Employment Division), following which a

return has to be submitted regularly every 4 months on the status of the migrant

workers so recruited. Originals of the work contract also have to be submitted in

triplicate for vetting by the Ministry. For the employment contract to be valid and

legally binding, the Code Civil Mauricien (Articles 3 and 1101) requires that both

parties must be capable (of age and mental fitness), have an unambiguous and legal

object, have an unambiguous consideration (some form of compensation which in

our case implies a salary), and consent between parties (Article 6 of the Code

Civil).

Section 6 of the Recruitment of Workers Act further requires that All expenses

incurred in connection with the recruitment of a worker shall be borne by the

Employer or the licensee. This implies that all expenditure, including license fees,

legal fees, scouting, detection, selection, recruitment, air fares, food,

accommodation, commuting, living expenses, repatriation costs and expenditures

relating to burial in case of demise in Mauritius, to be paid for by the company

employing the migrant worker.

- The Non-citizen (Employment Restriction) Act 1973


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Under this Act, an employer has to employ a dedicated Health and Safety Officer

whenever there are more than 100 employees on the companys payroll. This act

requires new recruits, especially migrant workers, to undergo a medical check up

including a screening for HIV before being granted a clearance for entering

Mauritius.

- Other conventions and protocols ratified by the State of Mauritiuso Mauritius is member to the International Labour Office (ILO) since 1969,

by virtue of which Mauritius is bound to ratify and enforce all of its 182

conventions. To date however, Mauritius ratified only 38 of them and only

29 are enforced.

oThe UN Convention on the Protection of the Rights of All Migrant Workersand Members of their Families is a framework addressing the numerous

problems faced by migrant workers worldwide and acknowledges their

contribution to the economies where they offer their skills. This convention

ensures to migrant workers judicial redress in case their rights as workers

have been violated.

o Under Article 5 and Article 6 of the Universal Declaration on HumanRights, slavery and slave trade are prohibited and forbids the use of torture,

cruelty, inhumane punishment and degrading treatment unto all people,

including migrant workers. The other Articles forbid abuse in any kind,

exploitation and discriminatory treatment in host countries.

- Public Procurement ActThe aim of the Public Procurement Act is to provide an incentive to the

construction industry for employing a maximum number of Mauritians on their

payroll. The Act prescribes that the tenders submitted by contractors be given a

degree of preference (called Margin of Preference or Domestic Preference)

when either

o the Mauritian contractor has more than 85% Mauritian nationals in itsworkforce

o in case of an international joint venture with Mauritian partner, the Mauritian contractor has more than 85% Mauritian nationals in

its workforce and

the international partner employs at least 15% of Mauritian nationals


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o In case of sole international contractor or an international joint venturewithout any Mauritian involvement, at least 15% of Mauritian nationals on

their payroll.

Incidentally, Mauritian contractors who choose to employ migrant workers up to

the legal limit (following the 1:3 rule, as per the Non-citizen (Employment

Restriction) Act 1973) find themselves ineligible for Domestic Preference, but yet

have remained competitive on most local tenders so far (PPO, 2006). However, the

presence of Chinese contracting heavyweights such as Sinohydro since 2009 is

causing a significant impact on the local construction industry: they are acquiring

most major publicly floated construction projects as their tenders are about 35%

lower than local companies, which therefore have to find new ways of addressing

this form of competition.

2.2 The Advantages and Disadvantages of Employing Migrant WorkersIn a study focussing on Chinese workers on a building construction site, Putty (2008)

had established that the overall performance of Chinese compared closely to that of

Mauritian workers. His study showed that Chinese workers had higher levels of

communication and manual dexterity skill compared with their Mauritian counterparts.

These were found to be due to better training received in their early years in the trade,

and that they possessed higher ability to cope with stress. The Chinese workers also

showed better assiduity (absenteeism being very low to nil) and responded better to

incentives than Mauritians. The latter however equalled the Chinese on cooperation

skills level in specific tasks, and even scored better on intelligence and decision-making

processes. Other parameters, except for creativity in problem-solving, were not

statistically significant for a clear-cut case in favour of either foreigners or locals.

Finally, absence rate was significantly much higher among Mauritians than Chinese

during the 3-month long investigation. This study unfortunately did not consider the

costs aspect at all and in the absence of which the economic worth of employing

foreigners could not be established.

At this level, one may infer that the higher availability of unemployed people should

have countered the need for importing labour. Therefore there are new parameters that

explain why the trend in increased dependence on foreign labour was not reversed.

Ramdoo (2005, as quoted in Mungroosing, 2007) explains this as follows: local


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workers consider construction employment unattractive, on account of its low salary

and high insecurity.

Hein (2004) identified that local employers found the following traits to be missing

from Mauritians as compared to foreign workers who were praised for:

- High motivation to work- Low absenteeism- Eagerness to do overtime- Availability for night shiftsIn the same vein, Mootyen (1995) recorded the submissive nature of foreign labour

as regards local employers perception of how expatriates responded to their

instructions. This study was probably hinting towards the power distance culturaldimension referred to by Hosftede (Armstrong, 1928) whereby these expatriates were

brought up in a culture that tended to have higher acceptance levels of hierarchys

imposing style of giving instructions.

This a confirmation, as stated by Mungroosingh (2007), of a previous University of

Mauritius survey whereby it was found that local Mauritians were reluctant to take up

3D jobs (Dirty, Dangerous, Difficult). Combined to the growing reluctance to

unattractive job settings, the World Bank (2010) accurately predicted that the

population growth would not be able to meet the demand for economic growth as

ambitioned by the country.

Naiko (2006) resisted the anti-Mauritian bias that seem to be established since 1990,

arguing that employers too had their share in repelling potential local workers by a

combination of unfavourable working conditions, meagre wages, abuse of compulsory

overtime, ignorance of family/social commitments, and lack of scope for advancement.

However, retention rates among migrant workers remained very low because the

economic advantage of having imported migrant workers was short-lived. Advantages

that could have arisen from the renewal of their employment contract (direct

investment costs of guarantees, air tickets and training costs through initial learning

process) were thwarted by the necessity to send them back to their homeland due to

their tendency to Indian workers tended to pick up bad habits from their Mauritian

counterparts(Mootyen, 1995): once acquainted with local customs and the local linguafranca from their colleagues (Dabeedial, R; 2001) Indians started bargaining for


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higher wages and absconding from work, thereby off-setting the gains that their

employers had anticipated to derive from their presence unfortunately, these claims

were not quantified precisely. Yet, they provide a serious an indication of the high cost

of employing foreign labour at the time. This high cost was later confirmed whereby it

was found that compared to annual inflation rate, workers have received much more

that[sic] they should get(Seebun, 1996). The abnormally high wage rates prevailing

in the construction industry (which Poonie (1996) found to be well above

Remuneration Orders), especially for specialist trades (principally masons, carpenters

and tilers) was also found to be driven by the high demand in times of chronic shortage

of skilled workmen on the local market. This study unfortunately did not weigh in the

effect of imported labour on the overall cost of employing manual workers in the

industry. Paradoxically, Naiko (2006) found that migrant workers were paid a basicsalary set at the minimum legal rate, but Mauritian workers were actually paid at a

much higher rate through individual bargaining.

2.3 Aim of Present Case StudyThe complex infrastructure projects built by Mauritian workers in the past without any

need for foreign input indicates that the skill level of Mauritians must have beensufficiently high as to deliver, but so far, studies have

- focussed narrowly on the engineering efficiency / productivity of foreign workers(Putty, 2008),

- viewed the problems encountered by foreign workers from an employersperspective with no supporting data (Mootyen, 1995)

- considered the effect of importing manpower from the macro-economic perspectiveonly (Mungroosingh, 2007 and Kowlessur, 2004).

Therefore, there is a need to verify the claim that the use of foreign workers translated

in higher profitability or value-for-money for local construction companies. Emphasis

has so far been on only the productivity of migrant workers their immediate

availability and their reliability has been assumed to be a safe indication of the

economic worth of the choicewhile the total cost of employing the foreign labour has

been ignored. This is the gap what the present case study aims at filling.


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Additionally there is anecdotal evidence (from conversations with Sotravic site

management representatives) that Mauritian workers are not productive, prone to

absenteeism, especially before or after public holidays. Some studies have confirmed

that this trend both in textile industry (Mootyen, 1995; Kowlessur, 2004; Mugroosingh,

2007) and in one case of a building construction company (Putty, 2008). The present

study will provide the opportunity to check whether this trend is confirmed or not in the

civil engineering construction company.

2.4 Background: Organisation ProfileSotravic Lte is a wholly owned Mauritian civil engineering company specialising in

the construction of piping systems including sewerage, potable water supply and

irrigation networks. It is registered by the Ministry of Public Infrastructure as a Grade A

Trenchworks contractor since 1992. It has successfully diversified into other

environmental / civil engineering markets such as dam rehabilitation/engineering, canal

and conduit construction, landfill construction and management and solid waste

management.

Sotravic relies almost exclusively on public tenders (or bids) for engineering

construction projects floated by various departments acting under ministries of the

Government of Mauritius. These projects are normally awarded to the lowest bidder,

subject to the bidder meeting specific pass/fail (mostly technical and financial, and

often on staffing requirements) criteria. Sotravic has a specific tendering department

which ensures that the technical, financial and staffing requirements of the bids it

submits are always met with, and leaving the forces of the market (competitors

normally) to decide if which bid is the lowest. Often, Sotravic was not the lowest

bidder, but has ended up being awarded a contract after all its competitors failed one or

more qualifying criteria set in the tender documents. This is important to note as it

would ultimately have a major influence the decision hire foreign workers.

2.5 The Need for Foreign LabourAs from 2007, the situation had completely changed: Sotravic faced an acute shortage

of labour when it was awarded contracts which were beyond its capacity. Tenders were

floated by the Government of Mauritius for three large-scale projects (Lot 1A, Lot 1B


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The initial response to this situation was to recruit massively on the local labour market.

Since it was known at the time that unemployment was on the rise it was assumed that

Sotravics labour requirements would be satisfied locally itself. The first initiative was

to launch an advertising campaign whereby posters were affixed in all major residential

areas of the country, promoting above-average daily wages. At the time, a breakerman

would earn on average Rs500 per day, while Sotravic offered Rs650 per day. This

poster campaign started in March 2008 lasted for 2 months and attracted 103 people,

out of which only 10 are still in employment to date.

The next initiative was to advertise through the television programme called TlPlus

which was broadcasted at high-audience time-slots (at 19:23on week-days just before

the French news bulletin on the first channel, and at 11:42 on the following day just

before the mid-day French news bulletin), for airing regularly twice a day during week-

days May 2008. 274 applicants called for an interview and 240 showed up for the

interview, out of which only 18 are still in employment to date.

The results of the poster campaign and TV campaigns are summarised below

Number of Respondents

Advertisement modeCalled for

interview

Showed up for

interview

Showed up

for work

Still employed after

12 months

Posters for 2 months 103 76 43 10

TV programme for 1

month274 240 81 18

Table 1: Summary of advertisement campaign for recruiting additional skilled labourers locally (source:

Sotravic HR Dept, 2008)

The turnover rate was about 75% and was too high to continue relying on local

recruitment.

2.6 Recruitment of Foreign LabourThe problem of low retention rate was tackled initially by hiring people from RodriguesIsland. After advertisement in newspapers, a first cohort of 94 workers from Rodrigues

reached Mauritius in March 2008 on a trial basis for a renewable contract of 6 months..

However, after training was given to them and despite being commended by site

management for their positive attitude to work all of these new recruits from Rodrigues

opted not to renew their contract.

The last option therefore remaining was recruitment from foreign countries: China was

considered as difficult owing to the language barrier and the rarity of local interpreters

that would be readily available for working as intermediaries between site management


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and work-front activities. At the time Sotravic management saw India as a logical

choice due to the perception that Indian workers had a shared ancestry with a large

fraction of Mauritians. The first cohort of Indian workers recruited arrived in Mauritius

in October 2009, and it was mobilised to a small site as part of their training.

Since then, more Indians we recruited for working on Sotravics sites until they now

form about 21% of the total workforce. They are principally mobilised to Sotravics

Plaines Wilhems sites where most of the workload was concentrated from 2008 to now.

As these sites are nearing completion, it is now time to choose between keeping the

Indian teams in employment for supplying to future construction sites on future

construction projects which Sotravic is vying to acquire, or to allow these expatriates to

return home and to turn back to hiring Mauritians but with a different approach. The

present study focuses on the evaluation of the contribution of these foreign workers to

Sotravic.

2.7 Problem StatementFilling in vacancies on some major projects is a contractual obligation to clients for

ensuring that the execution process is completed on time. However it is also important

to shift focus from only filling a gap and to evaluate the merits of employing

expatriates. To quantify advantages and disadvantages of employing foreign workers

for performing trenchworks, it is required to examine the cost of employing foreign

workers (said to be prohibitively high) and to identify how Sotravic derives economic

advantage, albeit sustainable, from the venture, if any. It is also an opportunity to assess

whether local labour force can be relied upon for meeting challenges represented by the

future large-scale projects.

2.8 Main Aim of StudyIt is required to determine by how much and how far Sotravic has benefitted, if any,

from employing guest workers from India, and how they compare with their Mauritian

counterparts after some three years performing trench works in the same conditions.


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- Unit cost of producing trenchworks: excavation works, concrete works andreinstatement. Unit costs are defined as the cost of doing one unit of a job item. The

unit cost may also be converted in a number of man-hours needed to complete the

same unit of job item, and gives an indication of the time required for completing a

series of similar job items. These unit costs are also essential in the estimating

process as they are used as basis for forecasting the overall cost and duration of a

project. In our case:

o To analyse and compare unit costs of producing these specific elements oftrenchworks by foreigners and Mauritians

o To identify the causes that explains the differences, if any.o To determine the extra over costs of employing a foreigner, for each

specific element of trenchworks- Total cost of performing work in similar conditions

o To quantify the impact fixed and variable costs total extra cost of employingforeigners over Mauritians at same conditions


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3 Methodology3.1 BackgroundA sewer network as built in the Mauritian context uses gravity to drain wastewater

outlets of houses and businesses. The wastewater outlets usually consist of black

water outlets (toilets) and grey water outlets (kitchen and lavatory sinks, shower/bath

tub and other soapy water outlets). Black water outlets are normally connected as near

to a sewer main as possible, while grey water outlets are made to pass through a

separation chamber (known as a gully trap in order to prevent floating matter and/or

sinkable objects from entering the network as they are principal sources of obstruction.

These wastewater outlets are laid at the minimum gradient possible in order to ensure

that the solid matter they contain are conveyed at the minimum fluid velocity possible

which will ensure turbulent enough flow also known as self-cleansing velocity. The

additional feature of these pipes is that they may be buried at shallow depths (not

exceeding 1.5m) they generally do not sustain major traffic loadsthey are protected in

concrete in case they cross parking / garage spaces. However, in order to ensure

minimal problems during its service life, the house connection pipeline (like all sewers)

is laid in straight sections only, i.e., no horizontal curves are allowed in any pipe

section. Obstructions are circumvented by means of straight sections of pipeline

connected by inspection chambers which offer the possibility of introducing a bend in a

pipe section while giving access to service personnel in case of problems.

Figure 3: Plastic inspection chamber with live house

connection Figure 4: Gully trap freshly concreted


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The wastewater outlets are routed to collectors located in the frontage of individual

properties (this is so as to minimise confrontation between owners of neighbouring /

adjoining properties) by means of laterals interconnected with inspection chambers

which drain into street sewers. The street sewers are also laid at a self-cleansing

gradient, but given that topography may not be uniform, they have to be laid deep

enough in order to be able to offer a drainage path to all house connections which drain

into it. This means that the depth of the street sewer is governed by the deepest house

connection available in that street. Similar to house connection pipes, maintenance is

made possible by the introduction of inspection chambers (but of larger dimensions, and

are called manholes) at regular intervals whereby service personnel can gain access to

the pipeline in order to attend to operational problems.

The street sewers are made to drain into collector and trunk mains of large diameters

(usually above 250mm), while house connections seldom exceed 160mm in diameter.

These diameters are chosen in order to cater for flows anticipated during the service life

of the sewers and govern the width of the trench that will enable practical and safe

working procedures.

3.2 Parameters - TrenchworksMeasuring a quantity produced by one worker per day is not feasible as workers are not

isolated on a construction site. They work in teams, where specialised tasks forming

part of the work item are attributed to members of the teams, and the team-members

usually swap between their roles in order to adapt to new situations that prevail as and

when required. For example, a pipe laying team consists of one or two pipe layers

assisted by a number of apprentices and helpers. These apprentices and helpers will

normally be attributed tasks that are apparently unrelated to pipe laying such checking

alignment in the trench, correcting bedding levels in the trench, lifting of pipes,

transporting them near the work front, lowering them into the trench, placing them in

the alignment, handling of and preparing pipe lubricant, applying lubricant to pipe

sockets, handling abutting (pushing of pipe spigot end into the socket of the previously

laid pipe) tools and holding ranging rods for checking level. The pipe layer has the

responsibility of placing the pipes in alignment and effecting the connection into the

socket of the previously laid pipe, with the assistance of the apprentices. Therefore, the

task of pipe laying cannot be attributed to only one worker but to a team, and any pipe


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section laid is the outcome of a combined number of man-hours. The total quantity of

pipe laid during the day is therefore the outcome of the useful man-hours contributing to

completing the pipe section assigned to them. This is common to pipes laid for street

sewers (the collectors and mains) and house connections (the ones branching off the

collectors and main sewers laid along streets).

Figure 5: Trench excavation by hydraulic excavator Figure 6: Pipe laying for street sewer

Figure 7: Street sewer with installed manhole made of pre-cast elements

However, pipe laying can be performed on a stretch only after excavation is completed

on that stretch. Often, excavation is the critical component of the works: it is the pace of

completing this activity alone which determines the pace at which all other activities

will be attended. Excavation is principally carried out by heavy excavation equipment

wherever possible, i.e., wherever there is sufficient space to accommodate the width of

the equipment


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- Nature of soil layers: trenches excavated in rock take more time but their internalfaces do not crumble and obstruct the trench during laying of pipes, while trenches

excavated in soil may crumble when their internal faces start to dry out upon

exposure, or worse, when rain falls and wets the soil beyond their absorptive

capacity.

- Presence of buried obstructions: this is a very common problem encountered inurbanised areas, where there are a number of existing services like telephone

cables, electrical wiring, and potable water lines are encountered while digging the

trench along the intended pipe alignment. This poses a difficulty to excavators

first, as the existing underground services may get damaged when they are not

shown on drawings, and not marked according to standards. At a second level,

these existing services may have been embedded in friable material which crumblesdown into the freshly prepared trench during and after excavation. The added

precautions (in the form of securing the existing services, more stringent control

over movement of equipment and material handling procedures inside the trench,

added care when manoeuvring manned equipment) to be taken by both equipment

operators and direct labour for trenchworks tends to reduce their overall output.

Figure 10: Difficulties impeding on trench work

progress: obstruction posed by uncharted buried

ducts and presence of high groundwater level


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- Other underground difficulties: the presence of roots and / or existing cess pits neara freshly excavated trench implies that foul water will seep into the freshly

excavated trench. Often, the effects of this seepage have to be controlled by

pumping, and the presence of the pump itself represents a hindrance to movement

of people, materials and equipment.

The study will rely on the availability of secondary data compiled routinely for the

operation of selected departments operating within Sotravic, namely the Payroll

Department, and the Site Quantity Surveying Department.

The Payroll Department is responsible for compiling attendance records by logging

thumbprint data taken from all sites and offices run by Sotravic. These records cover the

whole of the cohort of foreign workers as well as all local employees.

The Site Quantity Surveying Department operates on all active construction sites run by

Sotravic. This department is responsible for compiling data logged by direct work front

supervisors about the quantity of resources (human and mechanical) and materials used

for effecting site operations and determining the amounts to be paid to employees,

subcontractors and suppliers from the quantities of work handled for pre-determined

periods, usually fortnights (two-week periods). The QS Department also uses the data

logged by supervisors to compile the list of quantities of work completed for any given

month for submitting to the client, who uses this monthly statement of work as basis for

processing payment to Sotravic.

The data logged by supervisors and compiled by the QS department is collected through

General Foremen who is responsible for checking on consistency and freedom from

errors in measurement after initial vetting by the supervisor himself. The QS

Department then checks for overlapping with previous work in progress or left

unattended while waiting for engineers instructions or for obstructions to be removed.

Following vetting by the QS department, elements of pay are calculated on a piecework

basis by multiplying the number of units completed for the period with the established

piecework rates. However, it may happen that piecework rates alone do not exceed the

normal salary level if the operative had been working on a daily wage basis. In such a

case, the normal practice is to pay the worker his normal daily wage in order to avert

him being penalised and in so doing prevent any negative effect on worker morale.


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3.5.1 AttendanceFirst, the attendance records will be scrutinised to assess the level of absenteeism of

workers in general, and then to determine whether there is a significant difference

between that of foreign workers and their Mauritian counterparts. The trends will be

analysed over time (since 2008) in order to detect whether or not absenteeism patterns

of foreigners tend to follow that of Mauritians over time as claimed in past studies. The

source of data will be the roll-call compiled by the Payroll Department of Sotravic Lte,

and the test will be performed on the whole population.

3.5.2 Efficiency and ProductivityProductivity of foreigners will then be compared by analysing data routinely collected

on a daily basis for monitoring work (such as hours of resources spent on work items)and outcomes (such quantities of work completed) are compiled by site data supervisors

for processing of payments to workers and subcontractors. It is proposed to use this

mass of data compiled on sites run by Sotravic Lte employing foreign labour for

processing in view of comparing the productivities of foreign workers with Mauritian

workers. The data available will cover the whole duration of works on site from the

beginning. The following methodology is to be adopted:

1. Data checking (completeness, accuracy, consistency) for all three sites Lot 2,Lot 1B and Lot 1A.

2. Analysisa. calculation of performance on street sewers, house connections,

manholes

b. comparison of means on different job items (pipes in house connections,pipes in street sewers with varying levels of difficulty from depth and

road width, and rock content.

c. Hypothesis testing at 95% confidence interval:Data available from existing records will be inserted into SPSS in order

to determine the descriptive statistics and check on the hypotheses as

follows: Ho there is no difference in performance; H1 - there is a

difference in performance between foreign and local labour.

3.5.3 Financial analysisBased on the actual costs of hiring expatriates, running costs associated to keeping them

in employment (bonuses, accommodation, food and other allowances, air tickets,


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guarantees, recruitment and selection costs, among others), the following will be

determined

a. Fixed and Variable Costs of employingi. foreign labour

ii. local labourb. Unit cost of production of items of trench work for house connections and street

sewers

3.5.4 Relative benefitsThe benefit of using foreign labour against local labour will assessed with reference to

productivity and unit cost achieved using foreing labour, compared to using Mauritian

labour.

3.6 Data SourcesIt is proposed to use data compiled by the QS department on all construction sites

employing workforces constituted of both local and foreign labour. The basis of this

initial choice is the necessity to compare similar activities and to avert bias due to non-

similarity of tasks being measured / surveyed. For the purpose of this study, permission

has been obtained from Sotravic Lte for having access to the full data available about

attendance and work performed by its cohort of both local and foreign workers recruited

since 2008.

Attendance data will be analysed from thumbprint attendance compiled at Sotravics

payroll department.

3.7 ConstraintsThere are errors in consistency of logging site activities since 2008 discrepancies of

this kind are normally detected at the end of a construction project which normally last

for less than an year, but in the case of Plaines Wilhems projects, all run for more than

36 months, and these discrepancies are the result of work in progress being counted as

and paid for by the Client well after the completion of these items. The resulting lag

between costs being outlaid for executing an item and receiving the corresponding

money from the Client causes a mismatch at the site level which may cumulate errors of

computation regarding running figures, thereby heavily distorting actual progress rates


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being achieved on site. These errors have been corrected only as from late 2011, and the

data analysed for this present study take due consideration for this.

Another significant constraint was the question of the size of the database. After

collating data from January 2010, it was found that a data file of more than 55,000 rows

and 43 columns had been obtained. When attempting to insert these into SPSS, it was

found out that the version available for student use was limited in many ways and

analysis could not proceed. Instead, the data was kept on an MS Excel file format, and

statistical analysis was carried out while taking precautions in order to avert processing

errors.

The other significant constraint will be that of the time of the study: works have been

ongoing since 2008, but will not have reached completion by the submission date of thepresent study. Indeed, unforeseen circumstances of various nature have delayed

completion all sites and a cut-off date has to be set in order to meet the submission

deadline. Since all the data accumulated to date will be analysed, it may be safely

assumed that the data about the completed works will be representative of the final

works.

As for the question of confidentiality of Sotravics figures, this may be minimised by

the use of standard construction prices as publicly issued by the Construction Industry

Development Board (2010).

3.8 ResourcesThere are no additional resources proposed to be used for the present study. The

secondary data from quantities already compiled, checked and vetted by the QS

Department will be used for analysing the parameters under investigation for thepurpose of comparing / identifying any differences in performance levels between local

and foreign teams.


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4 Analysis & FindingsThe results of research objectives and answers to research questions formulated in

Section 2.9 and Section 2.10 provided below are based on analyses compiled in Section

8 Appendix Calculation Results, and are sorted in the order that they are discussedbelow.

4.1 Attendance and PunctualityMauritian teams were compared with Indian expatriate teams on the basis of attendance

to work by filtering attendance records and the results are shown on the graph below:

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

Jan-1 1 Feb-1 1 Mar- 11 A pr -1 1 May-1 1 Jun-1 1 Jul -1 1 A ug -1 1 Sep-1 1 Oct- 11 Nov- 11 Dec -1 1 Jan- 12 Feb-1 2 A pr -1 2 May-1 2 Jun-1 2

Attend

anceLevel,%

Period

Attendance level of Mauritians

Attendance level of Foreign workers

Figure 11: Comparative trend in attendance levels

The difference in absenteeism is significant at 95% level of confidence: Indian

expatriate workers are present at 93% of the time on average, compared to 86% only for

Mauritian workers. It appears that these expatriate workers almost never take any local

leaves, and are absent generally for health problems only, while Mauritian workers tend

to take leaves at a much higher frequency (on average 3%, up to a maximum of 22%)

for many other reasons.


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However, it must also be noted that attendance of expatriates tends to suffer after the

first year in employment, as illustrated in the graph below:

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0 5 10 15 20 25 30 35 40 45

No.Ofpa

idleavespermonth

No. o fmonths in employment

No. Of paid leaves per month within 1st year of

employmentNo. Of paid leaves per month after 1st year of

employment

Figure 12: Attendance of expat workers before and after first year in employment

The mean number of days of paid leaves taken by expatriate workers increases more

than ten-fold from 0.02 to 0.33 days per month after the first twelve months of the

migrant workers employment. Therefore there is a significant impact on attendance

levels when a worker knows that he is entitled to paid leaves.

4.2

Productivity level on trenchworks

Mauritian teams were compared with Indian expatriate teams by filtering records for

lengths of pipeline laid by teams of pipe layers on the following criteria as follows:

4.2.1 House connections4.2.1.1 Pipe Works4.2.1.1.1 110mm Pipe worksOn the smallest pipe available (110mm diameter uPVC pipes) there is a significant

difference at 95% confidence level. in pipeline lengths laid per man-day: 12.3m of


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110mm pipes are achieved per local man-day compared to 12.9m per foreigner man-

day.

This may be explained by the Kurtosis and skewness patterns pertaining to the

productivity in 110mm pipelines for foreign workers being completely different for

local workers as demonstrated by the comparative histogram below:

0

5

10

15

20

25

30

35

40

3 6 9 12 15 18 21 24 27 More

Frequency -Local

Frequency - Foreigner

Histogram of comparative lengths of house connections pipeline (110mm diameter) laid per man-day

Figure 13: Histogram for comparing lengths of 110mm house connections achieved per man-day

4.2.1.1.2 160mm Pipe worksOn the larger pipe (160mm diameter uPVC pipes) there is a significant difference at

95% confidence level. in pipeline lengths laid per man-day: 5.0m are achieved per local

man-day compared to 5.9m per foreigner man-day.

.

4.2.1.1.3 All diameters of pipes for house connectionsIt is established at 95% confidence level that foreigners generally perform at higher

output level (11.6m per man-day compared to 10.9m per man-day for locals) for laying

pipes in house connections.


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4.2.1.2 Inspection Chambers4.2.1.2.1 Plastic Inspection ChambersThere are two sizes of plastic inspection chambers available for use in building house

connections: the smallest is of 450mm internal diameter and the larger one being of

600mm diameter, normally for the deepest (near 1.5m), and often longest, lines

connecting a toilet to the street sewer.

In this case, it is also seen that expatriate workers perform better than locals at 95%

confidence interval:

- 2.5 plastic chambers of 450mm diameter can be laid per local man-day of work,compared to 2.8 per foreigner man-day.

- 2.4 plastic chambers of 600mm diameter can be laid per local man-day of work,compared to 2.8 per foreigner man-day.

4.2.1.2.2 Pre-Cast Reinforced Concrete ICsThere are two sizes of pre-cast reinforced concrete inspection chambers (PCRCICs)

available for use in building house connections, and they are normally employed in

heavily trafficked areas (normally by the inhabitants vehicle(s): the smallest is of

450mm internal diameter and the larger one being of 800mm diameter, normally for the

deepest (near 1.5m), and often longest, lines connecting a toilet to the street sewer.

In the case of the 450mm PCRCICs, has been found that that expatriate workers

perform better than locals at 95% confidence interval as 1.3 PCRICs can be laid per

local man-day of work, compared to 1.4 per foreigner man-day.

However, in the case of the heavier 800mm PCRCICs, it has been found that there is

no significant difference at 95% confidence interval that there is a difference in number

of chambers completed per man-day: 1.0 PCRICs can be laid per local man-day of

work or foreigner man-day.

4.2.1.3 Summary of productivity on House ConnectionsThe table below summarises findings on the productivity of local workers in

trenchworks compared to foreign workers.


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Trenchworks itemProductivity

per local man-day per foreigner man-day

110mm pipe 12.3 m 12.9 m

160mm pipe 5.0 m 5.9 m

All diameter pipes 10.9 m 11.6 m

Plastic IC450mm 2.5 No. 2.8 No.

Plastic IC600mm 2.4 No. 2.8 No.

Pre-Cast IC450mm 1.3 No. 1.4 No.

Pre-Cast IC800mm 1 No. 1 No.

Table 2: Comparative productivity of local and foreigners in hose connection works

It may be seen that foreigners tend to achieve higher daily average figures on most

tasks. However, the difference narrows down with increasing level of difficulty, as

illustrated by the productivity figures for large plastic ICs and pre-cast concrete

chambers.

Examination of support resources deployed to these work fronts shows that there is a

more intensive deployment of skid-steer loaders (also known as bobcat), lorries, air

compressors, all of which add to make these foreigner teams more expensive.

4.2.2 Street Sewers4.2.2.1 Excavation4.2.2.1.1 Road Width constraintThe impact of difficulties was measured by starting with the most obvious one for

excavation: the width of the road.

Road conditionLength achieved (m per man-day)

Local Foreigner

Narrow: width 4.5m 10.0 9.4Table 3: Effect of road width on productivity of operators of excavation equipment

All of the above comparisons of the means have been found to be statistically

significant to 95% confidence interval. It may be seen that local operators tend to

achieve higher progress rates than foreigners, but the difference in performance level

narrows down with increasing level of difficulty posed by working space.


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4.2.2.1.2 Rock Content constraintGiven the basaltic nature and volcanic origin of the local soils, the constraint of rock

content has also been found to have an impact on productivity of operators of

equipment. However, it has been found that despite being statistically significant, the

difference in performance between local and expatriate operators is most often less than

20%, as summarised below:

Road width

Metres per day of Local Operator metres per day of Foreigner Operator

Rock Content Rock Content

Low(0% - 40%)

Medium(40% - 60%)

High(60% - 100%)

Low(0% - 40%)

Medium(40% - 60%)

High(60% - 100%)

Narrow: 4.5m 16.1 NO DATA NO DATA 11.4 NO DATA NO DATA

All road widths 10.4 8.5 6.5 7.1 7.1 5.1

Table 4: Effect of rock content and road width on productivity of operators of excavation equipment

It may be observed that in low rock content, the difference in productivity increase with

road width, which again confirms that local operator make more judicious use of the

sides of the trench while excavating, especially in manipulating the excavating arm of

the machine for adapting to rocky conditions by swapping to hammer for breaking up

hard material and back to bucket for emptying the trench.

4.2.3 Pipe worksOn the smallest pipe available (160mm diameter uPVC

1pipes) there is a significant

difference at 95% confidence level. in pipeline lengths laid per man-day: 4.4m of

160mm pipes are achieved per local man-day compared to 5.0m per foreigner man-day.

On the larger pipe (200mm diameter uPVC pipes) there is a significant difference at

95% confidence level in pipeline lengths laid per man-day: 8.6m are achieved per local

man-day compared to 21m per foreigner man-day.

1uPVC is an abbreviation for unplasticized polyvinyl chloride a substance that is chosen as pipematerial in order to give the finished pipe resistance to deformation and chemical attack in underground

conditions.


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4.2.4 Concrete WorksThe comparative figures for concrete works have been compiled and summarised in the

table below. It must be noted that all of the difference in the means have been found to

be significant to 95% confidence interval.

Concrete works items

Man-day requirement

per unit of work

Local Foreigner

Gully Trap (No.) 3.2 2.1

IC Covers (No.) 2.8 2.5

Slab or Kerb (sq.m) 6.8 7.4

Tiles (sq.m) 6.8 6.3

Brick Laying (sq.m) 12.2 5.9

Concrete Flooring (sq.m) 15.8 13.1

Floor finish (sq.m) 13.8 12.4

Raising Manhole (No.) 1.4 1.0

Benching / Making-Good No. 1.4 0.9Table 5: Comparative man-day requirement per unit of concrete work items

It must be noted that all of these difference in the means have been found to be

significant to 95% confidence interval.

It is also worth noting that except for slab / kerb laying, local workers appear to perform

better than foreign workers on all other concreting tasks.

4.3 Financial Analysis4.3.1 Total cost of recruiting, employing and retainingThe unit costs pertaining to the items identified in section 4.1 will be used as basis for

forecasting the overall impact on the cost of undertaking a project using foreign labour.

The employment of foreign workers implies that upfront costs have to be incurred since

2010 in fulfilling legal and administrative procedures, all of which have to be factored

in the daily cost of a foreign worker. The costs associated to normal contract duration of

two years and broken down as per the following items:


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Fees and charges per head (one-off) Amount, Rs

Application fee 500

Work permit fee - per year 5,000

Bank guarantee fee for contract duration (i.e.

2 years)500

Air ticket, incoming (one-way, worker fare) 19,000

Air ticket, outgoing (one-way, worker fare) 19,000

Total 44,000

Table 6: Upfront charges and fees (variable costs) for importing foreign labour

Another class of costs relate to the accommodation of the whole cohort of expatriate

workers is made up of the following components:

Amount, Rs Total

Variable costs

Utility bills - monthly

CWA 17,143

CEB 20,537

MT 15,000

Cooking gas, LPG, per month 6,600

Cooks (3 No.s), per month 42,000

Transport (8 trips per work-day), per month 8,000

Furniture 1,200

110,480

Fixed Costs

Dormitory building rental, per month 180,000

Watchman, per month 5,000

Supervisor / coordinator, per month 12,000

Operations manager, per month 25,000

Cleaner, per month 3,000

Other sundry and housekeeping 640

225,640

336,120

Table 7: Variable and fixed monthly costs of employing expatriate labour

It may be noted that following representations by Sotravics 200-strong cohort of

expatriate workers a cook per geographical origin had to be recruited in order to cater

for their particular regional culinary tastes3 cooks in all: first for those coming from

Orissa, a second one for those from Bihar, and the third for those from Tamil Nadu.

The total indirect cost of employing an expatriate worker is therefore a sum of the

variable costs (compulsory, administrative and accommodation) and fixed costs, as

follows:


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Total administrative fees per head per year for

contract periodAmount, Rs

Application fee 250

Work permit fee - per year 5,000

Bank guarantee fee for contract duration (i.e.

2 years)250

Air ticket, (one-way, worker fare) 19,000

24,500Cohort size 200

Total administrative fees for cohort 4,900,000

Variable costsCost per

monthNo. of months Amount, Rs Total, Rs

Utility bills

CWA 17,143 24 411,435

CEB 20,537 24 492,885

MT 15,000 24 360,000

Gas (cooking) 6,600 24 158,400

Cooks (3 No.s), per month 42,000 24 1,008,000

Mandatory meal allowance (@ Rs 40/day per

head)243,333 24 5,840,000

Transport (8 trips per work-day), per month 8,000 24 192,000

Furniture 1,200 24 28,800

353,813 8,491,520

Fixed Costs

Dormitory building rental, per month 180,000 24 4,320,000

Watchman, per month 5,000 24 120,000

Supervisor / coordinator, per month 12,000 24 288,000

Health & Safety Officer, per month 45,000 24 1,080,000

Operations manager, per month 25,000 24 600,000

Cleaner, per month 3,000 24 72,000

Other sundry and housekeeping 640 24 15,360

270,640 6,495,360

19,886,880

Variable costs - per head per month = total variable costs (cohort size contract duration in m

= (4900000 + 8491520) (200 24)

2,789.90 Rs

Fixed costs - per head per month = total fixed costs (cohort size contract duration in mont

= 6495360 (200 24)

1,353.20 Rs

Total costs - per head per month = 2789.9 + 1353.2

4,143.10 Rs

Table 8: Identification of variable costs and fixed costs of employing foreign labour

The total indirect cost of employing an expatriate worker is therefore Rs 4,147.27

As seen in section 2.1, the Labour Act 1975 implies that expatriate workers become

subject to mandatory contributions in the EWF, NPF and NSF if their original 2-year

employment contract is renewed for one additional year. This additional cost (Rs 500

application fee and Rs5,000 yearly work permit) is equivalent to an additional variable

cost of about Rs 458 per month. Since this extension was applied to only 15 of the

present cohort of foreign workers, this additional cost has not been considered.


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The comparison of total cost of employing foreign and Mauritian workers has been

worked out after compiling the following data related to expenses incurred:

- the average monthly wages earned by all expatriate workers since their recruitmentand the average monthly wages earned by Mauritians in employment for the same

period

- the monthly mandatory contributions which Sotravic makes in relation to labourlaws

- the various incentives provided to employees for retaining their services piecework schemes and overtime

- Insurance premiums for workers: a mandatory requirement in relation to civilworks contracts for providing essential insurance coverage for workers operating in

dangerous environments.


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Foreigner Mauritian

A Basic Pay 8,210.29 7,773.61

A.1 Bonus 45.16 249.56

A.2 Special Bonus 159.21 676.01

A.3 End-of-Year Bonus 8,414.65 8,699.17

16,829.31 17,398.35

B Mandatory Employer's Contribution

NPF - National Pension Fund - 479.11

EWF - Employer's Welfare Fund - 200.50

Employer's Levy - 127.14

C Allowances

Meal 40.00 74.71

Transport - 846.19

D Paid Leaves - Statutory Requirement

Local leave

= 16 days' equivalent of Basic Pay269.93 255.57

Sick leave

= 21 days' equivalent of Basic Pay539.85 511.14

Arrears - 846.19

E Additional incentives

Piecework 1,737.29 1,645.00

Overtime 3,030.58 2,328.00

F

Annual Labour cost

= A.3 + 12 (A + A.2 + A.2 + B + C + D +

E)

176,802.39 200,851.96

G Severance Pay

Insurance Premium= 0.1% of Total Annual Labour Cost (F)

1,473.35 1,673.77

H Employer's Liability

Insurance Premium

= 1.5% of Total Annual Labour Cost (F)22,100.30 25,106.49

I Recruitment and selection from abroad 4,143.10 -

Total monthly cost of employment, Rs 41,749.06 42,792.99

Monthly Average

Table 9: Calculation of monthly cost of employing workers: foreigners v/s Mauritians

It is worth noting that employing Mauritian workers is subject to mandatory

contributions such as EWF, NPF and NSF as from their first month of employment

itself.

4.3.2 Unit costs relating to trenchworksThe monthly cost of employing workers can be worked back to determine unit costs.

This may be simply determined by finding out the number of hours that can be obtained

from the unit cost of an employee. The table below illustrates the unit cost of a typical

110mm house connection sewer:


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From section 4.2.1.1.1, it was found that one man-day of foreign worker could produce

12.9m of 110mm house connection pipe work against only 12.3m from a local worker.

Therefore, from a financial point of view, since one foreigner man-day costs Rs 27,510

per month, the unit cost of the 110mm house connection pipe can be worked out as

follows:

Total Labour cost, Rs Foreigner Mauritian

per month 41,749.06 42,792.99

per working day

= total monthly cost (5 365 12 7)1,921.60 1,969.65

Productivity, m/day

House connection pipework 110mm diameter 12.90 12.30

Cost per m= Cost per w.day productivity (Rs/m)

1921.6 12.9 1969.65 12.3

148.96 160.13

Progress per thousand rupee

= productivity cost per w.day (m/Rs)1,000 1921.6 12.9 1,000 1969.65 12.3

6.7 6.2 Table

10: Calculation of unit costs: per unit of work and per unit rupee

The above calculation can then be extended onto the other parameters that were

analysed in section 4.2 above, and summarised below:


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Total Labour Cost per month 41,749.06 42,792.99

Total Cost per working day

= total monthly cost (5 365 12 7) 1,921.60 1,406.89

Unit of work

per man-day

Cost per

work unit

(Rs/unit)a

Progress per

rupee (m/Rs)b

Unit of work

per man-day

Cost per

work unit

(Rs/unit)a

Progress per

rupee (m/Rs)b

House connection

Pipework: 110mm diameter 12.9 149 6.7 12.3 156 6.4


Pipework: all diameters 11.6 166 6.0 10.9 176 5.7

Inspection Chambers

Plastic IC's: 450mm diameter 2.8 686 1.5 2.5 769 1.3

Plastic IC's: 600mm diameter 2.8 686 1.5 2.4 801 1.2

PCRCIC'sa: 450mm diameter 1.4 1,373 0.7 1.3 1,478 0.7

PCRCIC's: 800mm diameter 1.0 1,922 0.5 1.0 1,922 0.5

Street Sewers

Excavation

Road Width:

Narrow 6.3 305 3.3 6.6 291 3.4

Normal 5.9 326 3.1 7.2 267 3.7Wide 9.4 204 4.9 10.0 192 5.2

Road Width & Rock content

Narrow &

High rock content 6.2 310 3.2 6.3 305 3.3

Medium rock content 5.6 343 2.9 7.5 256 3.9

Low rock content 7.4 260 3.9 7.8 246 4.1

Normal &


Medium rock content 7.5 256 3.9 8.9 216 4.6

Low rock content 7.1 271 3.7 11.5 167 6.0

Wide &

Low rock content 16.1 119 8.4 11.4 169 5.9

All widths &


Medium rock content 7.1 271 3.7 8.5 226 4.4Low rock content 7.1 271 3.7 10.4 185 5.4

Pipe works



Concrete works

Gully Trap (No.) 2.1 915 1.1 3.2 601 1.7

IC Covers (No.) 2.5 769 1.3 2.8 686 1.5

Slab or Kerb (sq.m) 7.4 260 3.9 6.8 283 3.5

Tiles (sq.m) 6.3 305 3.3 6.8 283 3.5

Brick Laying (sq.m) 5.9 326 3.1 12.2 158 6.3

Concrete Flooring (sq.m) 13.1 147 6.8 15.8 122 8.2

Floor finish (sq.m) 12.4 155 6.5 13.8 139 7.2

Raising Manhole (No.) 1.0 1,922 0.5 1.4 1,373 0.7

Benching / Making-Good No. 0.9 2,135 0.5 1.4 1,373 0.7

NOTE:

a Cost per m = Cost per w.day productivity (Rs/m)

b Progress per rupee = productivity cost per w.day (m/Rs)

c PCRCIC's: abbreviation for Pre-Cast Reinforced Concrete Inspection Chambers

Foreigner Mauritian

Table 11: Calculation of cost per work unit and progress achievable per thousand-rupee unit

It must be noted here that unit of money of one thousand rupees was chosen for

convenience so as to allow comparisons with whole figure numbers to be made.

Generally, it may be seen that the faster the team, the better the progress per unit of

money can be achieved. Mauritians perform better than Indians on street sewers and

concrete works, but Indians are better in house connection works. The only exception to


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perform better than locals in laying these 160mm diameter pipes, as confirmed by the

overall performance level when the filtering criterion of pipe diameter is removed.

This trend may be explained by the fact that house connections made with 160mm pipes

are often used to connect more than 5 houses in one common entrance, thereby

involving much more fittings along one stretch of the 160mm diameter pipe. This

requirement normally complicates the job, and the pipe layer has the responsibility of

being creative enough to complete his assignment with the least number of fittings

possible. It is also worth noting that the standard deviation is much less than for 110mm

pipes, indicating that the larger pipes are normally laid in larger corridors, and which

facilitates coordination between workers. One caveat of the data is that there is no

indication of the involvement of the work front supervisor in the coordination and

decision-making process when selecting the most efficient combination / layout of

fittings for connecting the house connection branches onto the 160mm house

connection.

5.3 House Connection ChambersPlastic inspection chambers can easily be lifted and carried by one person without

assistance. It has been found that foreign workers would perform better on plastic ICs

irrespective of their size: one foreign man-day achieves 2.8 450mm plastic IC against

only 2.4 per local man-day. However, the difference in level of performance with larger

ICs is at most only 10%.

When it comes to pre-cast reinforced concrete ICs, the peculiarity here is that the

smaller PCRCIC can be lifted manually, i.e., without the use of mechanised equipment,

while the larger one weighs over 180kg and cannot be lifted otherwise. Also, PCRCICs

require some level of concreting: at the interface of pre-cast-rings, at the building-in of

the pipe into the benching and at the cover. The labour component is therefore muchmore intensive than that of plastic ICs: normally plastic ICs can be put in service by a

pipe layer team, while PCRCICs cannot be put in service unless properly concreted in

place.

The fact that there is no significant difference in performance level in laying large

diameters pre-cast inspection chambers can be explained by the fact that laying of the

heavier sections of ICs requires a substantial level of coordination with hoisting

personnel (crane-lorry drivers, pipe layers, supervisors) so as to ensure that the manhole

adheres to technical requirements the cost of misplacing the manhole can be quite


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high because, unlike plastic ICs which can be easily twisted into position and re-done

almost at will, concrete PCRCICs once set have to be broken up if ever modifications

are required after concreting.

Also, productivity tends to decrease, while the difference in performance between

foreigners and local workers narrows down with increase in difficulty as these tasks are

increasingly more dangerous when the components become heavier. Indeed, the

heavier components command a higher level of attention in the manipulation and

installation process for safety purposes mishaps would be potentially fatal, and

therefore the progress rates appear to be controlled by safety considerations.

5.4 Street Sewers5.4.1 ExcavationForeign operators outperform local operators only in wide roads where the trench is dug

in low rock content the easiest combination. However, it may be seen that the

constraint of width imposes more restraint to the operator, Mauritian operators perform

faster and that the difference in performance decreases as width decreases. Mauritian

operators tend to perform much better when the trench is dug through rock, showing

more dexterity in manoeuvring their machines and also making better use of the space

available at the sides of the trench for speeding up their workdepositing temporary

dumps along the sides of the trench in wide conditions allows digging to be pursued

while waiting for an empty lorry to return.

When the difficulty of excavating in restricted working space is compounded by the

increase in rock content, performance levels fall generally for both local and foreign

workers. However, local operators still perform faster. The difference in performance

level decreases with increase in rock content on account of more numerous

manipulation of the excavator arm when swapping from bucket to hammer. There is no

way of shortening this manipulation, and this has to be performed more often when soil

conditions become harder. Also efficiency of the excavation process is greatly reduced

by a number of factors such as

- Rock tends to occupy more space when broken up, and when trenches are dug out,the volume of material to be removed is greater than the theoretical volume of the

trench.

- As rock content increases, the width of the trench also increases as a result ofuncontrollable and unavoidable over break of the sides of the trench, which


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collapses, thereby increasing the volume of material to be removed from the trench

in order to make it workable.

- Uniformity of the soil layers cannot be accurately predicted beforehand familiarity with local soil strata can translate into increased dexterity in the

excavation process.

Overall, Mauritian operators of excavation equipment tend to be generally more

productive than their Indian counterparts in excavating trenches at any combination of

difficulty. However, when constraints such as road width and rock content become

more stringent, the difference in productivity tends to narrow down

To the credit of foreign operators it must be noted that they are used to digging in

Mauritian soil which is basaltic in nature soil which much more irregular due to itsvolcanic origin while they are used to work in a material of predominantly granitic

nature in the continental shelf of India. This country is expected to possess a soil made

up of more weathered material to greater depth which is easier to dig up and more

predictable in terms of depth of rock layers.

5.4.2 Pipe workThe difference in performance between locals and foreigners on the 200mm pipeline is

unexpectedly large (147%). This can be explained by the fact that expatriate teams

were deployed on street sewers after 25 May 2012, as from which date restrictions on

permissions for excavating along major roads had been lifted, while Mauritian teams

remained on secondary roads where excavation resources and support had already been

mobilised and could not be removed. The low progress of local labour was somewhat

compensated by the fact that Mauritians were well versed in large diameter GRP pipes

(between 350mm and 600mm in diameter). These work fronts were moving at the

appreciable rate of 12m per day when administrative constraints were removed,

considering the fact that these large diameter pipes require significant coordination for

hoisting pipe sections into the trenches. Unfortunately no data was available for

comparing with expatriate labour as the latter had not been trained for laying these

large-diameter pipes.

The comparison may therefore not be relevant given the different circumstances in

which the teams were operating. The assessment should be repeated when both teams


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are brought to work under similar conditions, i.e., when they are facing the similar

constraints in terms of nature and severity.

The exceptional performance of expat labour must also be viewed from the perspective

of global site resources. Indeed, upon examination of the involvement of support

resources deployed around foreigner- based work fronts , it may be seen that they take

up more of support resources than local-based work fronts.


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TRENCH CONDITIONS LOCAL foreign LOCAL foreign LOCAL foreign LOCAL foreign LOCAL foreign LOCAL foreign LOCAL foreign LOCAL foreign LOCAL foreign LOCAL foreign LOCAL foreign LOCAL foreign

Pipe Diameter 200 / 250 uPVC 200 / 250 uPVC 200 / 250 uPVC 200 / 250 uPVC 200 / 250 uPVC 200 / 250 uPVC 200 / 250 uPVC 200 / 250 uPVC 200 / 250 uPVC 200 / 250 uPVC 200 / 250 uPVC 200 / 250 uPVC

RoadWidth ALL Narrow Normal Wide Narrow Normal ALL ALL Narrow Normal Wide Narrow Narrow

TrenchDepth ALL Shallow Shallow Shallow DEEP Deep Deep Deep Shallow Shallow

RockContent ALL Low Medium

LocalOperator 1,713.00 - 380.00 - 1,067.00 - 133.00 - 10.00 - 22.00 - 1,403.00 - 365.00 - 823.00 - - 129.00 2.00 NO DATA 2.00 -

ForeignOperator - 126.00 - 32.00 - 85.00 - 4.00 - 2.00 - 1.00 - 117.00 - 30.00 - 78.00 4.00 - - - 2.00

EXC HOURS 14,047.75 1,068.30 3,071.50 290.20 5,164,507.47 726.00 1,284.00 32.00 67.50 12.30 129.00 3.30 12,684.65 1,036.10 2,948.50 292.30 8,382.90 666.70 32.00 1,284.00 14.00 15.00 12.30

Lorry(20T) (inNos) 32.30 2.00 1.30 - 29.00 2.00 - - - - - - 29.30 2.00 1.30 - 26.00 2.00 - - - - -

Lorry(15T) 456.50 34.50 17.00 1.00 434.50 32.50 29.00 4.00 - - 10.00 - 362.00 32.50 17.00 1.00 313.00 26.50 4.00 29.00 - - -

Lorry(


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5.5 Concrete worksThe analysis shows that Mauritians outperform Indian workers in most of the concrete-

placing items of work, which contradicts the hear-say / anecdotal evidence that Indians are

better than locals. An inspection of the data series shows that there are indeed a few Indian

teams whose performance matches that of Mauritians, but the trend is not sustained

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