CEYLON INSTITUTE OF BUILDERS
Q: What are the recent developments in the construction industry?
Dr. Rohan Karunaratne (RK): Two decades ago, Sri Lanka lacked specialised contracts but this situation has changed. Local contractors are now capable of handling an array of construction projects.
Foreign constructors previously dominated high-rise buildings but local construction companies are well-equipped to develop 70-80 storeys. European companies used to undertake water projects but local constructors embark on massive projects. And a similar story applies to steel buildings.
Additionally, our knowledge in geo-environmental engineering has improved. From having no experience in facing climate risks such as landslides and relying on foreign firms to help us, we’ve come a long way to produce two or three specialist construction firms with the relevant knowledge.
The quality of our work has also improved. Compared to India, Bangladesh, Nepal and even China, our construction quality is of a relatively higher standard.
The Colombo International Financial City (CIFC a.k.a. Port City), luxury apartments, grander road networks and local contractors getting involved in bridge construction are some recent developments witnessed in the local arena.
Q: How is Budget 2022 likely to affect stakeholders?
(RK): The budget has put us in a predicament given that the government expects the construction industry to contribute 10 percent to GDP. To meet this target however, we need Rs. 1,000 billion worth of work in the country, which is unlikely to transpire due to economic, financial and forex issues.
The government has suspended all planned work on state buildings for the next two years, which amounts to around 300 billion rupees whereas another Rs. 80 billion is lost due to road construction being put on hold.
Therefore, the only means of meeting the GDP contribution target is through the private sector filling this gap, enabling the industry to contribute at least five to six percent.
This industry provides direct and indirect employment to over one million workers of which 650,000 are labourers. The budget can have a negative impact on their livelihoods and businesses in the supply chain will also face the brunt of this.
However, plans to establish 200 new factories to manufacture construction materials will help reduce local construction costs as up to 75 percent of these inputs are currently imported.
Q: Is the industry adequately addressing sustainability?
(RK): Green buildings are crucial but this is not being adequately addressed. As the industry is responsible for 40 percent of environmental pollution, we need to take urgent measures to curtail the risk of Sri Lanka becoming another New Delhi with its severe air pollution and smog.
It is impressive to see private sector companies and individuals becoming more environmentally conscious, and building eco-friendly commercial buildings and homes. This is an issue we need to focus on and look to reduce pollution levels by at least 50 percent.
Indeed, this will be such an enabler for sustainable development.
Q: Could you share your thoughts on Budget 2022?
Ruwan De Silva (RDS): This is the beginning of a new multi-annual budgetary framework focussed on the future because the government understands that it must change the way of doing things with the ongoing economic and social development in the country.
This comes at a time when we are facing massive crises due to the failures of successive governments over the past 40 years and a lack of preparation to manage risks such as the COVID-19 pandemic, which has had repercussions for the economy.
By looking at past mistakes and learning from the success stories of other developing countries, the focus this year should not be on the short-term outlook but on creating long-term strategies.
Q: How can the shortage of skilled labour be addressed?
(RDS): A shortage of skilled labour is imminent. This is not only applicable to Sri Lanka but reflects the situation prevalent across the world.
With the digital revolution dominating the business landscape, we should change our work practices and embrace new technologies. Moreover, we should educate and train our youth with relevant skills so that they are familiar with these technological evolutions.
The workforce needs to be reskilled and upskilled, and now is the time to think about creating lasting change and help young people overcome challenges – and this requires transforming the education system.
Q: What is your take of construction businesses at present?
(RDS): Several global changes have had transformational effects on the construction industry, requiring significant automation and the use of robotics. Process automation, modular buildings and off-site construction are the needs of the hour to meet the demand for increased urbanisation.
With rising labour costs, there’s also an urgent need to rethink construction methodologies in a more digitalised robotic process.
There are many barriers such as red tape, bureaucratic processes, outdated rules and regulations leading to delays in decision making, which affect the nation’s economic development. However, the present government understands this and has taken steps to reform regulations in an effort to make public services more productive.
