Nonpayment of dues to suppliers is challenging the industry – Janaka Perera

Sri Lanka’s construction industry had been on a fast track to prosperity since the end of the civil war in May 2009. However, progress has slowed of late. The primary cause, according to builders, is the unusually long delay in receiving payment for completed work for government ministries and state institutions.

Construction companies have been incurring massive losses due to the interest they’re compelled to pay as a result of these delays. Many businesses have been constrained to sell their properties to settle bank loans while some have even been forced to file for bankruptcy.

These organisations have many service providers such as small and medium scale entrepreneurs who produce bricks, wooden frames and tiles, along with large companies, which manufacture cement, roofing, paint and so on.

Nonpayment of dues to small-timers is affecting the industry badly as these people depend on immediate settlement for their products and services. Since they in turn take loans from banks and leasing companies to get production going, their survival depends on the timely receipt of funds for the products they sell.

Due to the current situation, most of these entrepreneurs have had to shut their factories due to not receiving payment on time; and consequently, they’re facing difficulties securing fresh bank loans. This in turn hits the workers employed by them.

This also results in skilled workers either leaving the country for employment or moving out of the construction industry in pursuit of other careers. As a result, there’s a severe shortage of construction workers in the island, higher labour costs and low productivity.

Unscheduled delays in payment have a negative effect on implementing infrastructure development projects planned by the government. If a construction company isn’t paid for the work done, it’ll find it difficult to raise funds to move on to the next stage of the construction work and the project won’t be completed as originally planned.

Among those who have expressed concern over the current situation are the President of the Ceylon Institute of Builders (CIOB) Dr. Rohan Karunaratne and Vice President Ruwan De Silva.

Giving priority to this industry is essential when allocating resources for each facet of development since it generates more employment and reflects the level of the nation’s progress.

The private sector has contributed more to the construction industry with related associations and contractors countrywide amounting to more than 5,000 personnel. Today, the construction industry depends primarily on technology especially IT to design buildings and minimise wastage in the sector.

Veteran architect Deshamanya Surath Wickramasinghe has stressed the need for an infrastructure development fund similar to that in India and many other countries – i.e. where international funding institutions have helped accelerate the development
of physical infrastructure in their countries.

Meanwhile, discussions have been held on the modalities of setting up such a fund.

According to Wickramasinghe, it’s not feasible for a government to continue to obtain loans from different foreign sources to develop the country. Last year, the Chamber of Construction Industry Sri Lanka (CCI) and Ceylon Asset Management held discussions with DFCC Bank on the modalities for setting up such a fund.

The industry needs to focus more on environmentally-friendly buildings and structures that blend with the landscape. This is linked to the introduction of low-cost construction technology.

In an era without air conditioning – whatever their imperialistic policies were – our European colonisers deserve credit for recognising the need to construct buildings to suit the then Ceylon’s tropical climate.

Buildings had large open verandas and high clay tiled roofs, and were surrounded by spacious gardens. Both colonial islanders and their European rulers were on common ground in terms of the environment, even though their architectural traditions and styles were different.

Many of the condominiums and high-rise buildings that have come up in severely congested areas in Colombo and its suburbs are eyesores, to say the least. And why is it that no government in Sri Lanka has banned the use of asbestos, which causes severe health problems?

Scarcity and the rapid decline of the Earth’s natural resources are major global issues today, and the construction industry is responsible for the large-scale utilisation of these resources. Therefore, a sustainable eco-friendly approach is vital in the present context.

The ultimate goal should be to raise our living conditions while protecting the environment for the future. Global warming and other unwelcome climatic changes, as well as the energy crisis, are warning signs that we should think of alternative methods in building construction including Low-impact development (LID) that will bring us closer to nature