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Contractors await resumption of long-delayed state projects
View(s):By Minaza Hassan
Incomplete projects that were abandoned due to the economic crisis’ adverse impact on the construction industry will be reviewed and steps will be taken to complete them, while finding ways to pay outstanding dues, the Construction Industry Revitalisation Committee has decided.
The committee held another round of talks on Thursday.
Susantha Liyanarachchi: Outstanding payments, price increases, high interest rates and loss of employment are major concerns
The Government last month appointed the committee headed by Sagala Ratnayake, senior advisor to the President on National Security, and Chief of Staff.
At Thursday’s meeting, it was decided to send a document on outstanding bills and outstanding projects to 28 ministries. It was noted that there were 218 outstanding projects involving 297 contractors.
An estimated Rs 144 billion would be required for these projects.
At present, 597 bridge projects have been stopped and an estimated Rs 25bn would be required to complete them.
National Construction Association of Sri Lanka spokesman Susantha Liyanarachchi told the Sunday Times that several companies had shut down.
Among them were the Nearest-School-Best-School project initiated by the Education Ministry with an investment of Rs.65 billion, other school projects, and road construction projects.
Outstanding payments, incomplete projects, price fluctuations, increased bank interest rates and loss of employment are among the issues the industry is saddled with.
This is concerning, considering that the construction industry had been one of the biggest contributors to the Sri Lankan economy (11.7% GDP), he said.
Much needs to be done to revive the construction industry which was not long ago one of the key contributors to the GDP. Pix by Indika Handuwala
However, this share has significantly dropped over the years, according to a document from the Chamber of Construction Industry. According to Central Bank annual reports, the sector’s GDP contribution fell to 6.1% in 2021.
Outstanding bills are a big issue and one of the leading causes of operations being halted. Several contractors and consultants have not been paid for state projects for years.
Non-payment or delayed payment has meant the industry has not been able to pay employees, sub-contractors, suppliers, and financial institutions.
Conflicting figures with regard to the outstanding bills were identified by the committee.
Payments held up, records not properly forwarded, contract documents not properly followed, and disputes over projects are likely to be some of the causes for the conflicting figures, noted Darrington Paul of the National Construction Association of
Sri Lanka. Steps were taken to categorise larger payments and settle them through Treasury bonds.
Price fluctuation is yet another issue. To mitigate price fluctuations, the Government must either pay the price variations or increase profit margins, said Mr. Liyanarachchi. “Over a million people depend on this industry.” Among them are carpenters, architects, builders, and engineers.
The committee intends to convene once more before concluding plans to revive the industry.
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