The Communist Party of Sri Lanka yesterday condemned the government’s decision to shut down the State Development and Construction Corporation (SDCC), describing it as a reactionary move, and urged all progressive forces to oppose it.

“Given the performance of the SDCC and the important role it plays within the economy and in the infrastructure and construction sectors, we can only surmise that the decision to close the institution down is driven by ideology and based on the vested interests in the construction sector,” the CPSL said in a statement.

The CPSL statement in full: “On 12 November, the Cabinet approved a memorandum submitted by the Minister of Transport, Highways, Ports, and Civil Aviation, Vijitha Herath, for the liquidation of the State Development and Construction Corporation (SDCC).

“The State Development and Construction Corporation (SDCC) is a state enterprise operating under the Ministry of Transport, Highways, Ports and Civil Aviation, specialising in heavy civil engineering construction projects.

“The SDCC was established in 1971 to undertake planning, designing and construction of single and multi-purpose development projects for irrigation, flood control, power, highways, water supply and drainage, land development and other similar projects and the manufacture of concrete and concrete products. It was also tasked with planning, designing and fabricating mechanical and electrical installations, extracting, manufacturing, importing and exporting construction raw materials, machinery and equipment, training of engineering and technical personnel and carrying out research, in connection with the above undertakings.

“The Corporation was envisaged as complementing the State Engineering Corporation, by undertaking infrastructural civil engineering work, and thereby enhancing the technological capabilities and industrialisation of the country. It was projected as one of a combination of public and private sector and foreign institutions to carry out the Mahaweli Project. For example, the Bowatenna Dam construction was initiated by the SDCC. Its role was greatly diminished after 1977 due to the Mahaweli scheme being undertaken almost entirely by foreign contractors.

“The SDCC undertakes a wide range of projects, including the construction of bridges, roads, highways, dams, irrigation structures and schemes, hydropower tunnels and powerhouses, water supply treatment facilities, buildings, as well as jungle clearing and land preparation. Additionally, the SDCC manufactures precast concrete products, such as prestressed concrete bridge beams, transmission poles, and concrete railway sleepers. It has also undertaken supply, installation & maintenance of traffic light systems and street lights covering the island. Its recent and current major projects include the overpass to the “Rectagon”, the new military HQ at Akuregoda, and the long bridge across the marshes between School Lane, Nawala, and Angampitiya, Ethul Kotte. In view of the current debilitating shortage of skilled workers in the construction sector, the SDCC’s expanding role in training young workers is vital.

“Despite functioning under the “new normal” post-COVID-19 conditions, in 2021, the Corporation managed to make a modest profit of Rs 43 million, compared to a loss the year before because of the COVID-19 pandemic. The Audit Department did not find evidence of major mismanagement or fraud. Non-payment of bills by state institutions to the Corporation impacted its efficiency, profitability and cash flow, as it had to take out bank loans to cover liquidity issues. Like other state institutions, treasury-imposed limitations of recruitment affected its ability to carry out its tasks. It could not by any means be considered a “burden on the treasury”.

“Previously, on August 21, 2024, the then Minister of Transport and Highways, Bandula Gunawardena, had submitted a Cabinet proposal to merge the SDCC with the Road Development Authority (RDA), which was approved in the Cabinet meeting on the same day. However, the merger could not proceed due to the dissolution of Parliament on September 24. Following the formation of a new government, Minister Vijitha Herath re-submitted the proposal, leading to the current decision to close the institution down.

“Given the performance of the SDCC and the important role it plays within the economy and in the infrastructure and construction sectors, we can only surmise that the decision to close the institution down is driven by ideology and based on the vested interests in the construction sector.

“The Communist Party of Sri Lanka condemns this decision by the Cabinet and calls upon all progressive forces and trade unions to oppose this reactionary move.”