The construction industry, a key pillar of the economy sustaining a large segment of the skilled and semi-skilled workforce who are currently out of work, will collapse if projects to the tune of at least Rs. 1,500 billion do not get off the ground this year, according to a construction sector expert.
According to statistics, between 300,000 to 500,000 workers lost their jobs due to the global pandemic that shut the doors for many workers in the industry which is a highly labour-intensive sector of the economy.
Secretary General/CEO, Chamber of Construction Industry of Sri Lanka (CCI) Nissanka Wijeratne said the construction chamber faced far too many challenges during the past four to five years without large scale projects which ensured the survival of the industry.
Construction chamber and industry personnel have made an urgent plea to the Government to resume the stalled projects during the Covid-19 pandemic and get the industry back on its feet.
However, according to CCI Chairman, the industry would have to import labour when projects resume as there is a severe dearth of workers who were compelled to seek greener pastures during the height of the pandemic and the economic crisis in the country.
Construction craftsmen in the country has been the least popular profession among school-leavers and youth who prefer clerical or highly paid white collar jobs.
“We have to offer a decent allowance of at least Rs. 2,000 a day to trainees for a four-month program, if the industry is to attract youth to vocational training and increase the number of construction craftsmen,” Wijeratne said.
The hassle in getting projects approved and the time taken for it have been major bottlenecks to develop the industry. According to industry personnel approval for buildings has to be sought from around 18 state institutions which take nearly a couple of years to get the project off the ground.
“The one-stop shop for approval of construction projects has been mere rhetoric. It took almost three years to get approval for a luxury housing project in the upcountry,” CCI Chairman said adding, that it has been about two years but still the approval for the construction of the new head-office of the Chamber in Colombo has not been granted.
The CCI has proposed through the presidential commission to amend the UDA Act so that building permits could be granted within one month of approval from all state institutions.
The Construction Chamber has recommended to the Government that projects above Rs. 200 million in value should commence only after a proper feasibility study is undertaken and to ensure that a National Planning Commission similar to that in India should be set up and approval of the Commission should be mandatory for all projects exceeding Rs. 200 million.
“This mechanism will help eliminate corruption taking place anywhere down the line in the process of getting the project off ground,” the CCI chairman said, adding that the enactment of a public procurement law as recommended by the IMF was vital.
He said at present there was widespread violation 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 minimise cost overruns. No unsolicited proposals should be entertained.
The CCI also said that procurement action should commence only if adequate funds have been allocated in the budget or secured. The Chamber also recommends having a senior professional on procurement committees on work contracts of over Rs. 200 million nominated by the CCI as an industry representative to ensure transparency in the Government procurement process.
On the growth of the sector, the Chamber notes that there has not been any change in the sector PMI, (Purchasing Managers’ Index) in December as against the previous month in 2024.
PMI, the monthly gauge of construction sector health, recorded an index value of 51.4 for December 2024, unchanged from the same index value in November.
However, according to the Index the sector had expanded in its activities through December 2024.
The construction industry recorded a satisfactory growth of 14.2%, 15.5% and 23.8% during the first three quarters of 2024 and it is optimistic about 2025 given the performance of the industry from January to September last year.
However, it appears that there is a pressing need for some large scale construction projects to be initiated for a meaningful recovery in the sector, including employment creation according to industry personnel.
