by Sanath Nanayakkare

Chamber of Construction Industry (CCI) of Sri Lanka Secretary General/CEO Eng. Nissanka N. Wijeratne points out that Sri Lanka construction industry in the first three quarters of 2024 recorded a growth of 14.2%, 15.5% and 23.8% respectively, and says that industry stakeholders are looking forward to brighter prospects in the Year 2025 and beyond.

 “Growth numbers in the said period are a strong indication that we have overcome the recession the construction industry faced during 2020 – 2023. However, to place the country on a trajectory of rapid economic growth and to be able to service Sri Lanka’s foreign loans without further borrowings, the government has to take drastic policy measures, learning from the mistakes in the past. In that context, the following proposals related to the construction industry warrant the keen attention of the government and the policymakers. We kindly propose to the government to consider implementing the following measures and policies with the objective of uplifting the construction industry and transforming it to be a major contributor to the country’s economic growth”.

Projects above Rs. 200 million in value should commence only after undertaking a proper feasibility study. To ensure this a National Planning Commission (NPC) similar to that in India should be established and approval of the NPC should be mandatory for all projects exceeding Rs. 150 million.

Enacting a Public Procurement Law as recommended by the IMF. At present there are widespread violations of the Government Procurement Guidelines. Procurement should be only on competitive bids on BOQ’s based on completed designs and documentation, to ensure timely completion and to minimise cost overruns. There shall be no unsolicited proposals considered.

Procurement action should commence only if adequate funds have been allocated in the budget or secured.

Ensuring transparency in government procurement process, Procurement Committees on works contracts over Rs. 200 million shall have a senior professional nominated by the Chamber of Construction Industry of Sri Lanka, as an industry representative.

Enacting a Building and Construction Industry Security of Payment Act, similar to the law in Singapore.

Implementing the proposal of the Presidential Commission on Simplification of Laws and Existing Regulations to ensure the issue of development permits within 3 weeks by amending the UDA Act to establish a statutory committee with time limits for granting these permits. As a more effective solution, steps should be taken to introduce a fully online approval process within 12 months like in Singapore.

Establishing a development bank to promote innovations and development of projects. NDB and DFCC which were development banks earlier have now become commercial banks after privatising. It is often said that the development banks played a leading role in the growth of tiger economies in Asia.

Amending Arbitration Act to ensure that arbitration hearings and awards shall be concluded within 3 months from commencement similar to the practice in Singapore. Currently, this alternate dispute resolution mechanism takes a long period resembling normal court proceedings.

Adopting a Code of Ethics applicable to all stakeholders of the infrastructure and buildings development process. Already such a code has been developed by the Construction Industry Development Authority (CIDA) which can be adopted as a regulation.

Exempting housing and apartment developments from turnover taxes as such taxes will be an additional cost to the individual buyers of these units.

Introducing a housing loan scheme at a concessionary interest rate of 5% repayable over 40 years to the first-time home builders, similar to the two generations home loan schemes in Europe.

Promoting exportation of construction services by undertaking works contracts abroad whereby the government shall select 10 proven major contractors, in consultation with the Chamber of Construction Industry of Sri Lanka, and facilitate necessary bank guarantees in US$ for one contract each to these companies to undertake works contracts abroad. Each of these major companies shall award sub contracts to 2 local companies, so that through this process 30 local companies will venture out on overseas work.

Promoting the exportation of consultancy services by undertaking consultancy contracts abroad whereby the government shall select 15 proven consultancy firms registered with CIDA in consultation with the relevant professional institute and facilitate necessary bank guarantees and professional indemnity policies in US$ to these firms to undertake consultancy contracts abroad.

Harnessing the full potential of Sri Lanka’s graphite, rock phosphate and mineral sands deposits (in east coast and at Arawakkalu, Puttalam) with high-tech investments.

Enacting the amendments to Construction Industry Development Act, No.33 of 2014 and the regulations and rules thereunder including the Regulations for Contract Adjudication that were discussed at the National Advisory Council on Construction since 2016, without further delay.

Establishing a Standing Steering Committee on Construction (SSCC), chaired either by the President or the Secretary to the President, or a Senior Additional Secretary to the President to regularly monitor the development projects with the authority to give directions to solve any issues impeding progress. This SSCC shall have suitable representatives from the construction industry, appointed in consultation with the Chamber of Construction Industry of Sri Lanka and shall meet at least once every month.

In addition to that, he advocates for a number of policies to promote good governance and reduce corruption to attract more FDIs into the country. A summary of those proposals are as follows.

Changing the Executive Presidential system to Westminster type of governance. Changing the present PR system to a mixed system with the “first past the post” system, district PR and national PR, restricting the Cabinet to 25 members, CIABOC Commissioners to be appointed by the President on the recommendation of Constitutional Council, ethical dealing with any allegedly corrupt politicians, promoting a digital economy with all-round cashless transactions, taking action to recover allegedly ill-gotten assets and gains invested abroad through the Stolen Assets Recovery Initiative (StAR) implemented by the World Bank in collaboration with UN office on Drugs & Crime (UN ODC), and if necessary, introducing new laws.