March 15, Colombo (LNW): The government has stepped into find some redress to the construction industry in Sri Lanka which is on the verge of collapsing in the economic crisis which has triggered the the shortage of building material and its high prices if it is available in some hardware stores.
Sri Lanka stands on the verge of losing a major industry – its construction sector, which notably contributes approximately 9.6% to the GDP and involves nearly 2.6 million stakeholders.
The industry has already seen a significant contraction by 60%, resulting in over 500,000 job losses and the emigration of more than 10,000 professionals. In response, the government has established a task force, producing a 51-point report, from which 11 critical points were selected for action.
Despite these measures, progress has stalled, necessitating urgent intervention to rejuvenate the industry.
Inthis context ,President Ranil Wickremesinghe announced that an expert committee would be appointed to investigate and propose solutions for the prevailing economic challenges, particularly within the construction sector.
This declaration was made during a discussion held at the Presidential Secretariat attended by industrialists from the construction sector, the President’s Media Division (PMD) said.
Wickremesinghe also emphasized the inclusion of experts from the Ministry of Finance, Ministry of Urban Development, and Housing in this committee formation process. Furthermore, he assured relief for industrialists across various sectors through debt restructuring by the following year.
The discussion also delved into the issues faced by contractors of all scales and parties within the construction field, including the revival of stalled projects, the establishment of an investment-friendly environment, the promotion of construction services, and alternative funding and contracts. Counselling matters were extensively addressed during the session, it added.
The plight of contractors, particularly in the SME sector, is alarming. They face immense hardships from halted projects, non-payment, and financial pressures, often risking personal assets.
The competitive nature of acquiring projects, with minimal profit margins, exacerbates their vulnerability, leading to a detrimental cycle affecting their entire business operation.
As the industry contends with these challenges, the proposal is for a high-powered committee to address contractor grievances, improve contract terms, and establish fair compensation mechanisms.
Senior Advisor to the President on National Security and Chief of Staff, Sagala Ratnayaka, Governor of the Central Bank Dr. Nandalal Weerasinghe, Secretary of the Ministry of Finance Mahinda Siriwardena, along with other ministry secretaries and representatives from related institutions and the construction industry participated in the discussion.
