CIOB seeks Finance Minister’s intervention to redress industry issues | Daily News
Cessation of Govt procurement for infrastructure projects questioned

CIOB seeks Finance Minister’s intervention to redress industry issues

The Ceylon Institute of Builders (CIOB) have written to Finance Minister Basil Rajapaksa, Rural Housing and Construction and Building Materials State Minister Indika Anuruddha Herath and several other decision-makers seeking redress to several issues the industry is facing and seeking their intervention in addressing them.

The CIOB recognizes the enormous challenges faced by the country and we acknowledge the continual effort of the Government in steering the country through loan repayment challenges, the pandemic and numerous other national and international concerns.

“However, we believe the recent Cabinet decision for cessation of Government procurement for infrastructure projects with immediate effect, is not the way to relieve the country of its economic predicaments,” CIOB President Dr Rohan Karunaratne said.

The concern regarding the Construction Industry’ use of imported materials and its heavy reciprocal impact on Sri Lanka’s foreign currency reserves, may serve to be one reason that pushes officials to halt the industry in such a way. “However, the answer lies in increasing the local production of these materials (and possibly pushing exports) and other novel measures, and not halting construction projects completely.”

CIOB points out that Lankan Construction Industry employs one million people indirectly and (as of 2014) contributes 9.6% to the GDP and is one of the sectors in the group that generates the second-highest employment opportunities in the economy. Over hundreds of thousands of people from material suppliers, manufacturers and sub-contractors down to the poorest labourer are affected by contractors. The finances and stability of the contractor trickle down to all levels of society and through various supply chains. “Therefore, halting the industry harms all these systems and obstruct the daily survival of thousands of everyday workers.”

The construction industry is one of the main cells in the chain of function which holds together Sri Lanka’s industries, workforce and economic systems. “Halting government procurement can hinder the activity and employment in these other sectors and break the smooth function of the country and its people.”

Since 2015, the construction industry in Sri Lanka has been experiencing severe financial difficulties and cash flow problems due to government changes, terrorist attacks, C-19 etc. “Amid these, when many tenders for construction and infrastructure development were called by the Government from 2020 onwards, this gave us new hope and zeal to revive construction and thereby support the nation.”

“Upon hearing the news that there would be a halt to government tenders of infrastructure and construction projects, the banks have again started tightening their position regarding facilities granted to construction companies. We once again fear that this will lead to further deterioration of our financial condition,” CIOB Vice President Ruwan De Silva said.

Furthermore, many construction companies have invested substantially on human resources, machinery and money, in pursuing the tenders that have already been called.

“They have also incurred financial payments in arranging bank guarantees for the tenders. Cancelling these tenders, many of which are ready for awarding, will result in these companies incurring further losses,” De Silva said.

CIOB says their advice to the government at this difficult moment in time, is to discard any projects that are deemed to be unwanted/impractical and only allow projects that are necessary for the country. “Hence, we kindly appeal to your good self to consider the enormous challenges that the construction industry is facing at this moment and consider altering this decision for the good of the Sri Lankan people and its industries.”

CIOB also extends their fullest support and cooperation in finding measures to relieve any issues that the government may incur in fulfilling this critical request.


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