The construction industry plays an indispensable role in the Sri Lankan economy in providing the physical infrastructure which is fundamental to the country’s development. However this industry experiences instability and interconnected structural problems which are associated with the declining demand, volatile nature of the demand and the consequent shedding of labour with resources becoming idle.

We have witnessed a uniquely project-specific and complex environment in which the industry operates combining different investors, clients, contractual arrangements and consulting professionals: on varying site conditions, designs, materials and technologies bringing together different contractors, specialist subcontractors and a workforce assembled for each project.

The industry is largely dominated by Micro, Small and Medium Scale Enterprises and this is continuing to be an informal sector with negligible presence in the stock market. Development of the SME Sector of the industry is frustrated by its inability to access opportunity, finance and credit as well as vocational and management training.

In a country affected by a civil war spanning a period of more than two decades, public investment in physical infrastructure is constrained giving rise to a need for promoting private sector and foreign direct investment in infrastructure development.

There is no doubt that the construction industry impacts directly on communities and the public at large and its improved efficient and effective delivery will enhance quality and productivity, health, safety and environmental outcomes assuring value for money to society at large. The specialized and risk associated nature of construction places an onus on the government to improve its procurement and delivery modes that promotes industry capacities and competitiveness assuring transformation and sustainable development of the industry. Development of the industry requires visionary political leadership and bureaucracy.

The government must have a vision and series of strategies for development that promotes industry stability, international competitiveness and capacity enhancement. With over 1.5 million people being directly and indirectly engaged in construction related employment, sustainability of the industry and elimination of regional imbalances requires more attention than ever before.

A magna-carta for industry development recognizing that “small and medium enterprises are the dominant constituent of the industry” is an absolute necessity. A declaration of policy recognizing the role and potential of the SME Sector for creation of employment and economic development could provide a self sufficient industrial foundation for the country in view of nearly 95% of the industry being from this vulnerable sector. The policy of the state to promote, support, strengthen and encourage growth of the industry through the establishment of adequate support structures and creation of an enabling environment has to be translated into a legislative enactment leading to intensifying and expanding programmes for development of skills and entrepreneurship, which could to some degree facilitate survival of a highly vulnerable industry.

With construction not being perceived as a thrust sector and reluctance of the banking community to provide the necessary funding, there lies a further need for government’s intervention to facilitate accessibility to sources of funds. A large percentage of the SME sector of the industry is from the outer regions. Therefore assuring them access to a fair share of government contracts in these regions is natural justice and would undoubtedly eliminate regional imbalances.

The procurement process should provide restrictions to ensure that contracts of lesser value falling within the financial limits of the grading scheme are not swallowed by larger players using advantages of economies of scale. The need for complementing and supplementing financing programmes for small and medium enterprises, doing away with stringent and burdensome collateral requirements, while instituting safeguards for the protection and stability of the credit delivery system is greater than ever before.

We need to promote linkages between large and small enterprises. Encouraging establishment of common service facilities and participation of civil society in the task of building up Small and Medium Enterprises.

To effectively spur the growth and development of the construction industry, the development of the larger players by providing them with opportunities and facilities to undertake projects beyond the boundaries of this island nation has been long overdue. If the larger players undertake overseas projects the medium enterprises will fill the vacuum and a logical enhancement of their capacities will take place.

In certain countries, all private contractors including sub contractors to whom awards are made for the undertaking of national and local public works funded by either national government or provincial administration including foreign assisted projects are required by law to hire at least 50% of the unskilled and 30% of the skilled labour requirements from the unemployed bona fide and actual residents of the province.

Such are the steps and legal enactments that have been followed for development of regional contactors. With not more than 5% of Sri Lanka’s construction workforce being accredited having received any kind of formal training, our grading systems and procurement process has in no way encouraged systematic training of its workforce. Articulating the need to invest in human resources development and reduction in the extent of informal sector activities in the industry with minimum basic social welfare schemes supported by occupational health and safety standards will undoubtedly change the image of the industry and attract young people thereby eliminating a major industry growth impediment.

The construction industry must be recognized as a high risk sector. Hazardous conditions at worksites are inherent. An acceptable site-specific safety management plan or safe work method statement must be made a condition of any contract to be awarded. Legislative enactments addressing these issues must be welcome by all industry stakeholders.

Human resource development at all tiers of the industry, cross fertilization of project management skills through a policy on public private sector cooperation and a target for percentage of construction workers to be skilled and accredited will no doubt assure quality of construction and reduce cost of construction. Not only should we require a trained construction workforce but continuous review of training curricular, regularly, to respond to industry needs of the day. This must be brought in under the regulations that could be gazetted from time to time.

Have we focused attention on gender issues? What is the mechanism that is in place to ensure compliance with labour regulations? An integrated approach to address environmental issues rendering sustainability of the industry has never been addressed. With the construction industry being classified as a major cause of environmental degradation, have we focused our attention on environmental impacts of buildings? Buildings have a profound effect on the environment, which has warranted the developed world laying greater importance on Green Building practices. It is stated that of the total energy consumed by Americans in 2002, 39.4% was consumed by buildings.

Sri Lanka has not made any advances towards architectural salvage and reclaimed material. Attention has to be focused on a series of issues with the single objective of developing the construction industry of Sri Lanka through enhancement of its capacities and competitiveness. The fundamentals to ensure sustainability of the industry and conservation of resources, efforts to protect the environment for future generations, to conserve energy and reduce green house gas emissions are areas to be included in a national policy programme. Methods to increase efficiency of energy saving programmes, and development of energy audit procedures in construction are yet to be effectively addressed.

The construction industry and civil society must endeavour every effort to promote good governance, transparency and accountability in public procurement and express its concerns on delivery outcomes of unsolicited proposals entertained on construction related projects designed for the benefit of society.

The writer is a former chairman of Sri Lanka Land Reclamation and Development Corporation, River Valley’s Development Board and Lanka Machine Leasers (Pvt) Ltd and currently serves as a member of the Board of Directors of the Colombo Stock Exchange.