Despite the recent price hike of cement, the cement shortage in the local market is expected to continue for at least another two months, according to industry sources.

 Lanka Ready-mix Concrete Association (LCRA) Chairman Anura Vithanage claimed that there are about 300 ready-mix concrete companies in Sri Lanka who are all facing dire circumstances due to the shortage of cement in the local markets.

Withanage further stated: “Prior to the current shortage, my monthly requirement was about 1,000 tonnes. However, I can barely get 500 tonnes now. It doesn’t matter if you have money, there is no cement in the market.”

Explaining further, he claimed: “According to cement suppliers, when they open LCs (letters of credit) for cement imports, they are granted approval only for a limited amount. 

Where once a ship would bring about 4,000-5,000 tonnes of cement, now when a LC is opened, approval will be granted for only about 2,000 tonnes. From these limited stocks of cement, the cement suppliers will give priority to their continuous cement buyers. Consequently, there is no cement available for the normal consumer.”

The Ceylon Institute of Builders (CIB) raised concerns over the worsening cement shortage and urged for swift solutions from the Central Bank.

CIB said the construction industry, being one of the largest GDP contributors and employment generators, is paralysed due to the massive shortage of cement in the country.

“We require local production of approximately 8.8 million tons, and presently, we can’t release this because LCs cannot be opened to import raw materials. 

Further, there is no stable selling price for cement. Although a fixed rate has been indicated in the range of 1,300, this is not our reality,” CIB Chairman Dr. Rohan Karunaratne said.

He said cement prices are dangerously volatile and the issue of such abnormal prices is overshadowed by the larger issue that cement (at any price) is markedly unavailable.

“Therefore, the Central Bank should offer an appropriate solution for banks to open up LCs for raw material importers of cement,” Dr. Karunaratne added.

According to CIB over the last two years, the cement market has struggled. First, there was a 11% year-on-year drop in total local production and imports, to 7.2 million tons in 2020 from 8.1 million tons in 2019. 

Then, imports fell by 18% year-on-year to 1.83 million tons from January to August 2021 from 2.24 million tons.

“Local production has stepped up to mitigate this, producing a final growth in total local production in 2021, and continuing this effort in 2022. But they cannot retain this untiring support to Sri Lankan building without their raw materials,” CIB Chief said.

“The cement industry is a good example of how dangerous exchange rate effects are, once again, making the survival of thousands of Sri Lankan workers and many of our copious businesses, an almost impossible job,” he added.

It was pointed out that the largest supplier Tokyo Cement (accounting for approximately 38% of production), INSEE (35%), Ultratech (13.6%), Singha etc., when questioned about the cement shortage, have warned the industry that no relief should be expected anytime soon and that this may continue, unless they are given the ability to open up LCs. 

Batticaloa International Airport is to be redeveloped as a fully fledged domestic airport following its previous attempt of upgrading it in 2018-2019 period with the aim of facilitating tourist arrivals in the country especially from India, Tourism and Civil Aviation Minister, Prasanna Ranatunga revealed.

A tripartite agreement will be signed by Airport and Aviation Services Pvt Ltd (AASPL), Civil Aviation Authority (CAA) and Sri Lanka Air Force to prepare a suitable plan for this purpose and implement it.

This plan is being devised by CAA to improve basic facilities at the airport including the building of control towers and the Northern section of the runway and installing fire fighting and rescue systems etc.

A special programme will be implemented to identify commercial investment opportunities inside the airport focusing attention on other investment opportunities relating to the domestic aviation industry, he said.

Batticaloa Airport and its infrastructure facilities are now being developed with the assistance of tourist hotel owners and activists in the field of tourism, he added.

A special meeting was held recently at the Batticaloa International Airport (BTIA) under the patronage of the Minister to discuss the future development opportunities of the airport and how it could contribute to domestic travel and the tourism industry in Sri Lanka.

The BTIA, the Gateway to Eastern Sri Lanka, was reopened for civil operations in 2018 and is geo-strategically located 2.4km South East of the city of Batticaloa awakening the eastern coast of Sri Lanka connecting to all domestic Airports of the country.

In a much hyped-up event in March 2018 the previous government declared open the airport after the reconstruction of the runway, apron and terminal building at a cost of staggering Rs. 1.4 billion with Treasury funding.

It was also then gazetted as an international airport as it enhances business and trade prospects in the Jaffna peninsula.

At that time Alliance Air of India was to launch direct flights from northern Sri Lankan to Chennai and Tiruchi but the plan halted midway due to COVID-19 outbreak and several other logistics issues, officials said.

Along with the development in Palaly, the government proposes to upgrade the other two regional airports — Ratmalana, located South of Colombo and Batticaloa — in the island to international airports.

For northern Tamils, it was a historic development in their region, which was badly affected by the civil war that spanned three decades until 2009, official sources said.

In addition to linking them to the Indian cities they frequent, the opening of an international airport also enhances business and trade prospects in the Jaffna peninsula.

The Palaly airport, some 20 km north of Jaffna town, has now been renamed Jaffna International Airport. Similar plans are afoot in the east as well,

The previous government has put in about Rs. 3 billion to upgrade Palaly from a regional to an international airport, extending its runway up to 2.3 km, with a plan to further extend it by another kilometer in the next phase.