With a view to enlighten our readers on the progress of the construction industry of Sri Lanka, the Sunday Observer spoke with the doyen of Sri Lankan Architects, Architect/Planner Dr. Surath Wickramasinghe, President – Chamber of Construction Industry, Sri Lanka.
Excerpts of the interview.
Q: Being one of the eminent Architects in the country and Founder President of the Chamber of Construction Industry, Sri Lanka (CCI), how do you see the present construction scenario in the country?
A. The Construction boom commenced its acceleration from around 2011, with the construction of the much needed infrastructure, such as in Airports, Harbours, Expressways, and improvements to the National Road Network etc. The rate of the construction industry growth was around 6.5 – 7 %. During this period, several mega projects also commenced, such as, the Shangri La Hotel Complex, Port City, ITC Colombo One Project, Phase 2 of the Havelock City, Keells Waterfront Project, tourism projects and apartment complexes in all parts of the country were initiated. Some of these projects are now getting closer to completion.
Q: The new Expressway Projects to the North and the Central Province and the Colombo International Financial City (The Port City) has recommenced, the Hambantota Port expansion, a few large scale industrial projects and new tourism and apartment projects along with the commercial development, have also commenced or will commence work soon. Some years back, there were visible signs of a construction boom everywhere in the country. Are we experiencing a slowing down of such mega development projects now?
A. I agree there was a slowing down, of projects and also investments, between 2015 to 2017. Nevertheless, the present scenario for the construction industry is very positive. We anticipate that for at least the next 15 to 20 years, the current boom will continue.
Q: What are your comments on the proposed Free Trade Agreements to be signed between China, Singapore, and India?
A. This is a grey area, the Government should concentrate more on areas such as marketing and trading, and leave the construction industry sector to be negotiated between the respective countries and the relevant State Agency – CIDA along with the CCI, and their counterparts in the respective countries. In doing so, Sri Lanka should ensure that Sri Lankans could also enjoy the same benefits in the respective FTA countries. If not, it would be counterproductive.
Q: What are the impediments facing the construction industry of Sri Lanka?
A. At present, the impediments outweigh the easiness to do business related to the construction industry, and it is not development friendly. For example, Government approvals and the sanctions required are not clear, with too many authorities to obtain approval from. This delay could sometimes be as long as a year. It is sheer frustration and apathy for Consultants and Developers. Urgent action must be taken, especially now, with a “Construction boom” at hand. Lack of skilled labour, shortage of sand, earth, timber, and other locally procured materials due to strict Government regulations, and without introducing any substitute materials for same, is another impediment to the construction industry. The cost of imported building materials have shot up due to the devaluation of the Rupee and additional tax burdens placed on them, recently.
Q: The lack of skilled labour is a highly visible problem confronting the construction industry. What are the efforts the CCI is making to bring it under control?
A. CCI has written to both, the President and the Prime Minister, and other allied Ministers to the construction industry, giving them ways and means of how to increase the skilled and unskilled workforce. CCI is also discussing with the Ministry of Economic Affairs, on how to attract young school leavers and the youth, now engaged as three wheeler drivers, security guards, etc. The CCI will soon forward a video to the Ministry for circulation, describing the work opportunities available for the youth in various disciplines, within the construction industry.
Q: Are you getting the required support from the Government?
A. It is a slow process, but, the Government is moving forward in the correct direction. For example, the minimum age for a three wheeler driver has been raised to 35 years. A “One Stop Shop”, under the Ministry of Development Strategies and International Trade is to be set up shortly. This will definitely fast track the planning clearances and other matters. Any further delay in setting up these Institutions will naturally be a deterrent to the growth of the construction industry.
Q: Will projects such as Port City and Western Province Megapolis have a salutary effect on the country’s construction sphere?
A. In the construction sphere, there will be a transfer of technology to the local industry, by working with international consultants and contractors. Consequently, the city will be transformed, be vibrant and smart, and generate international investment and development, coupled with leisure and recreation on par with any other developed city.
The Megapolis will bring sustainability and long term benefits to Sri Lanka on a similar basis.
Q: In your view, are there any other steps that have to be taken for the betterment of the construction sphere and professionals in Sri Lanka?
A. A major issue facing Consultants today is obtaining Planning Clearance from the UDA or CMC. There is no standard document or set of requirements to follow. Consequently, the Consultants have to keep on visiting the UDA or CMC to provide them with additional information to meet new requirements. This process takes at least six months and is an agonizing process. Therefore, a quick method should be adopted for the building planning/ permit clearance, by the relevant authorities, especially now, when there is a huge demand for projects to commence.
Q: Are there any other matters you would like to mention regarding the Sri Lankan construction sphere?
A. Yes, the local cost of construction keeps increasing, while the construction cost of our foreign counterpart is less. One reason could be that foreign contractors procure their materials directly from manufacturers overseas at a cheaper cost. For example, if a tap costs US $ 10, in the world market the same tap is marketed locally, by the agents at US $ 20 or more. Therefore, on mega projects the locals should follow the same procedure.
Furthermore, the “Negative List” maintained by the BOI prevents open market benefits to the local construction industry. Therefore, we propose that until the Sri Lankan manufacturers could supply quality building materials at competitive prices, the BOI suspends the operation of the “Negative List”. For example, if the world price of cement has dropped to Rs 600 per bag, and the local controlled price is Rs 950, still the contractors have to buy cement at Rs 950, thereby depriving them of bringing down their cost and compete with other countries.
Q: Any other issues that you consider important?
A. Water is getting scarcer, not only for the construction industry, but also for consumption by the public. We are made to understand that state agencies during peak periods of flooding intend to pump excess water to the sea. This in my opinion is inappropriate. Therefore, the Government must adopt a system similar to Malaysia, to pump the water inland at conveniently located reservoirs, even at higher elevations along the rivers. The Kelani River is a good example for this exercise.