CIDA must use its powers to keep construction industry alive

• Resolve contractors’ issues using powers by Construction Industry Development Authority Act

It is true that the Construction Industry Development Authority (CIDA) of Sri Lanka is the regulatory body for the whole of the Sri Lankan construction industry. It is important to remember that it was us (industry stakeholders such as engineers, contractors and other such allied professionals) who gave them this power. We worked immensely hard for a very long time to help CIDA gain this extreme power by passing the Construction Industry Development Act in 2014 by Sri Lanka Parliament. It says that it is “An Act to provide for the development of the construction industry in Sri Lanka”.

With such power the construction industry expects even more from CIDA. The construction industry has been facing extreme hardships for some time now. The construction industry was the first to be stopped when the economic crisis, pandemic, etc. hit.

CIDA has not been very present to address these issues. Yet it has the incomparable power to detangle them. It can use its power to recruit support from funding agencies, Government authorities, policy making powers, the international connections, etc. to resolve the following.

• Contractors do not receive extensions, escalations, relief for completion time, help with bank interest, taxes, extreme price increases and overheads.
• There is a frightening cut in project opportunities leading to competition and tight profit margins.
• Nothing is done to deal with payment delays, material costs, disrupted supply chains.
• We have no financial support from anyone to help amidst all these problems.
• Bond encashment is occurring in unfair and extreme ways together with cutting bills in ways that bankrupt contractors.

For this, we expect CIDA to get involved in the following:

• For halted projects, we need a fair evaluation so that contractors can settle their losses.
• For projects with limited budgets, descope the budgets with revised rates so projects can continue. As the Government has settled about 70% of dues this has helped a lot. But the rest remain, hurting contractors day-by-day.
• Strategically plan projects by way of descoping and adjusting the funding and scope of projects
• (re)formulate policies, standards of practice, etc. – CIDA Act
• Represent the industry on the national and international stage.
• improve employment in the construction industry.
• settle or mediate construction sector disputes – CIOB extends support to use the CIOB Mediation Centre with the blessings of CIDA for this matter.
• Solve concerns of industry related professionals, manufacturers, suppliers, contractors and craftsmen, etc. – CIDA Act
• Ensure public safety with regard to construction – CIDA Act
• Establish the construction industry development fund (which we have been expecting for a long time) which we really need at this moment than ever before – CIDA Act
• Gain low-rate soft loans for contractors’ survival.
• Help us gain time extension from Government and other officials (consultants, accountants, etc.) who take industry needs seriously – they do not consider the real-life problems such as bank interest, cost of preliminaries.

In short, if CIDA helps the industry to gain some momentum by restarting projects, the construction industry can help Sri Lankan employment, social development, international support, and contribute at least 5-6% to the GBP of Sri Lanka, a job we were once extremely good at.

(The writer is the President of Ceylon Institute of Builders.)