CIOB thanks Govt. for approving price escalation claims for projects over 3 months

• Looks to similar support for SME sector contractors with projects of less than 3 months

 The construction industry welcomed the move by the Government in approving price escalation claims for projects over three months.

CIOB President  Dr. Rohan Karunaratne

The Ceylon Institute of Builders (CIOB) along with the Chamber of Construction Industry (CCI) and National Construction Association of Sri Lanka (NCASL) have collectively taken action to resolve the contractors’ price escalation issue by writing to Prime Minister Mahinda Rajapaksa, Ministry of Finance, and Ministry of Construction, and via newspaper articles.

“We are pleased to learn of the Cabinet of Ministers’ decision to grant price escalation claims on various Government sector construction projects, with the continual help of Construction Industry Development Authority (CIDA),” CIOB President Dr. Rohan Karunaratne said in a statement.

“We thank the Government for the approval that has been granted to proposed price variations,” he added.

The price adjustment clause of the bidding document has not been included in the contract agreement for contracts of more than three months’ duration already awarded by Government institutions to compensate for the amount of price variations to the contractors so as not to exceed 20% of the contract value using the Price Verification Formulae of the CIDA.

“We have simultaneously requested the possible extension of the Government’s consideration to approve price escalation claims for SME sector contractors, projects of less than three months and to include the subcategory of electrical appliances, namely air conditioners, lifts, water pumps, etc., if feasible. 

This would remove conditional constraints for price escalation claims for contractors, which currently exclude small/medium-scale contractors and projects and claims concerning electrical appliances,” Dr. Karunaratne added.