The restarting of stalled mega development projects by donor countries in the aftermath of successful debt restructuring, the settling over 90% of dues to the construction contractors by the Government and reduction of construction material prices is making a huge positive impact on the construction sector to rebound, said President, Ceylon Institute of Builders (CIOB), Dr. Rohan Karunaratne.
He was speaking at the opening day of the World Construction Symposia at the Taj Samudra Hotel on Friday.
He said that CIOB had submitted various requests and comprehensive proposals to the Government, World Bank, ADB, JAICA, KOICA requesting them to restart halted projects.
“As a result, we now see a slow start in re-commencing these projects. JAICA may restart the BIA project and LRT project. KOICA and the World Bank have also re-started some of their halted projects. Fortunately, Exim bank too has approved 1.5 B USD to recommence halted projects,” he said. Commencing these projects will give the sector new opportunities to recover and consolidate.
Recalling the time of the constriction halt period he said, “Just imagine halting an industry with a turnover of over USD 800 to 900 billion, 5,000 contractors, almost 1,000 consultants, 2.6 million direct and indirect workers and the supply chain just idling?”
CIOB also took various initiatives to sustain the Construction Industry during these difficult years including in obtaining a moratoria and low cost loan of 7%.
Earlier one of the major barriers for restarting projects with the original cost estimates as material prices have skyrocketed by over 300 to 400% within the past four years.
It is pleasing to note that the construction equipment cost is coming down. But some of the larger construction companies are importing directly and hence get a huge price advantage.
Although prices have come down this is still insufficient to maintain our construction cost in par with the region. Therefore, CIOB has decided to create a transparent cost system via an e-platform, with the support of Laith Ratnayake and Prof. Chitra Weddikkara.
In contrast the smaller companies cannot do this and due to this we observe an emerging price mismatch between large and smaller contractors. “This should be addressed soon and corrected.”
Supply chains have also indicated that they observe an increase of around 15% to 20% increase in sales.
He also said that they are developing a special E tool which will enable building material buyers to see the global prices and this in turn will help them to have a better bargaining power when making purchases. “The UAIAD is helping us in these endeavours.”
