Roadmap will be formed to restart construction industry: CCI President

CCI President Jayantha Perera 

CCI President Jayantha Perera notes the current situation in the construction industry is disastrous, with no new work and projects being put on hold. He says a roadmap will be formed to restart the industry. Following are excerpts of the interview with Perera:

Q: As a President of CCI what plans do you have to navigate the industry in the coming year – given the present circumstances?

 We have requested the Government to set up a task force with equal participation of Government officials and construction industry private sector participation – there is a positive response from the President’s office and we await the formation. 

Q: What is the present situation in the construction industry? 

 Disastrous –– no new work – even ongoing projects are put on hold – no payments for completed work – all professionals and skilled employees are trying to leave – already a large number has migrated.  

Q: How many jobs have been lost, and how many companies have been closed?

 Over 500,000 lost jobs – many SMEs bankrupt – even some major companies on the verge of closure. Most can’t service the loans the contractors have taken from banks expecting money to come from work done, the interest rates have gone so high, one can’t even think of payback.

No concessions are being granted by the banks (the construction sector is akin to being blacklisted).  

Q:  How much are the arrears due from the Government for projects already undertaken and the impacton the construction sector?

 Over Rs. 209 billion for work already performed (not undertaken); the Government has promised to release Rs. 40 billion (Rs. 10 billion in cash and balance in bonds) before the end of 2022 – no indication of the balance. 

Q:  Has CCI proposed any plan to the Government and the banks to recover from this situation?

 A 15-point document was submitted to the Government on 8 November 2022. The Ministry of Finance has presented the same to the relevant ministries and authorities to send in their comments and proposals – once the feedback is received and the task force is established we should come up with a workable roadmap on how to restart the sector. 

Q:  There is discussion about Free Trade Agreements (FTAs) between India, China, Singapore and Thailand. How will this situation be affected for the construction industry in particular from the consultants and builders point of view?

 We have studied the FTA between Singapore and India and compared the SL and Singapore FTA. They are totally in opposite directions. Our contention is that any trade in services in construction related work shall be subject to Construction Industry Development Act, No. 33 of 2014.  

Q:  Has the CCI made any proposal to mitigate or overcome any shortcoming of the FTAs?

 CCI has formed a special committee of professional bodies and contractors to study this subject and will submit collective suggestions from the industry to the Government.

In principle what the Sri Lanka industry needs is reciprocal arrangements especially with regard to standards and laws (regulations). Related to use of materials and engineering standards and laws related to practice of contractors and consultants (CIDA Act) and UDA regulations. 

Q:  What are the new techniques that are being used in the construction industry in Sri Lanka?

New safety factors and also progress of raw materials procurement such as sea sand as substitute for river sand projects.

Many arrangements are in effect and some proposals are in progress

Use of washed sea sand is already in operation

Use of % of fly ash for some types of cement

Use of % of recycled scrap metal to produce certain types of steel

Many others are in the pipeline such as: Use of recycled waste, plastics, etc., to produce many construction materials such as paints, tiles, plaster, engineered timber, etc.            

Q:  Are there any other areas on which you would like to comment?

Many local materials and related industries developed during the 1970s, with the expertise of some professionals like Eng. Dr. Kulasingha. 

Prefab components, laterite blocks, light fittings, ironmongery, etc., have been totally abandoned due to policy of importing cheaply!

It is of paramount importance that we re-establish a development bank. A driving force in the rise of Asian tigers was the development banks.