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Lanka among the top in construction industry



Gotabaya Jayaratna

The Construction industry is one of the key industries that can put any country on the fast track of development. For the past three decades in which Sri Lanka was engulfed in a conflict situation what we witness was not a developing construction industry but a dying industry in the face of terrorism. Many efforts were taken not to construct but to protect many of our structures such as bridges, roads and other infrastructure facilities. But the end of the war in May 2009 has paved the way for the construction industry to bounce back and catch up with what they have missed for the past three decades. For the past three years it has shown tremendous progress and has become a major contributor for the economic development of the country.

Secretary to the Ministry of Construction, Engineering Services, Housing and Common Amenities Gotabaya Jayaratna joined the Sunday Observer to discuss about the fast growing construction industry of the country and its benefits and future challenges.

Following are the excerpts of the interview:

Q: After the end of the war the entire land mass in the country was free for development activities. Out of them the construction industry took an important place to lead the country towards prosperity. Can you explain the current position of the construction industry in Sri Lanka and its contribution to the economic growth of the country?

A: In the year 2011 the second highest sector of growth is the construction industry. The tourism sector has shown a 30 per cent growth. Economic growth of the country in the last three quarters of the year 2011 is 8.3 and based on that details those are the areas which have made maximum contribution to the GDP.

The leading is the tourism sector with 30 per cent contribution and the second highest is the construction industry with 17.3 per cent . It has shown a tremendous growth after last ten years. Actually, it shows the importance of the construction sector. If we take the economic infrastructure development it really shows the real potential for the country.

When allocating resources for each sector by the Government, the construction industry should have been given more priority, because it makes employment generation, it makes the balance development of the country, and it shows the level of development.

If we take infrastructure development of the country, it facilitates to expedite the development of the economy. Therefore , it becomes an investment but not a recurrent expenditure. Investment means we are gaining more for the country in every aspects.

After 64 years of Independence, we are giving more priority for the relief based programs, specially for the poverty alleviation programs. But if we think about the future, may be ten years, if we invest more for the construction sector it will support the economic development of the country tremendously.

Q: The Ministry of Construction, Engineering Services, Housing and Common Amenities is the key Ministry handling the construction industry in the country. How is your Ministry handling the affairs of the construction industry while keeping an eye on the industry as a whole?

A: The national responsibility on construction industry has been assigned to the Ministry of Construction, Engineering Services, Housing and Common Amenities. One of our major responsibilities is to give our fullest coorporation for the country to maintain economic development instead of construction.

The next thing is the construction sector which has been more or less contributed by the private sector. All the construction associations, all the contractors and even the provincial contractors amounting to more than 5,000 have been engaged in this sector all over the country.

Most of them have taken Institution for Construction Training and Development (ICTAD) registration which is a major criteria to maintain the qualities and standards of the construction industry. That is a must. This qualification is essential for those entitled for the government constructions.

At the moment we are developing the Construction Industry Development Authority. That has now been discussed under Cabinet sub-committee. Construction Industry Development Authority is based on Construction Development Industry Act. This mainly focuses on regulating the construction industry. This is going to be formed as a regulatory body for the construction industry for both government sector and private sector.

Q: Establishment of permanent peace, I think is the key factor for the construction industry to see such higher growth. Other than that what are the key factors that have contributed for the construction industry?

A: More than 5,000 contractors are engaged in this sector. They are really based on government construction as well as private sector construction. All the big companies based on foreign aid are already engaged in Sri Lanka now.

The National Planning Department and Finance Ministry and even the BOI has allowed them to invest in Sri Lanka. Based on that situation the biggest contractors are engaged in Sri Lanka. At the same time international reports are highlighting Sri Lanka as a very good country to invest within Asia. Business ranking has also compared to earlier situation and stated we are now in a higher rank. In the construction industry we are in a better position. Based on these data it has been proved at the international level, Sri Lanka is a very good country to invest in the construction industry under the current situation. Sri Lanka is ranked 102 out of 183 countries in business ranking. Even in starting a business Sri Lanka is maintaining the 34th place, according to Central Bank Report 2010.

These data shows that we are in a good situation. This kind of situation actually supported the international community to come into Sri Lanka.

In the meantime, the government economic policy has also given more priority for the construction industry in Sri Lanka. Especially our corporations under our Ministry SEC SD&CC State Engineering Corporation , State Development and Construction Corporation, together have invested more than Rs.15 billion for major constructions in Sri Lanka. This is based on the government projects.

Even private corporations have invested big amounts for the construction industry, specially for the construction of hotel industry, housing construction and also for constructions for the infrastructure based Ministries such as Health, Education . They have spent billions of rupees to ensure the basic facilities for the people in the country.

Q: What are the direct and indirect benefits to the country due to the fast growing construction industry in Sri Lanka?

A: These projects have generated employment opportunities for Sri Lanka and they have strengthened the skilled human resources in the country as it always require skilled human resource like engineering capacity, and skilled craftsmen like carpentry.

Tremendous opportunities are made available in the country after a long time. Otherwise they had to go to middle East countries as labourers. Now they have a very good industry, for them to have employment in their mother country. Compared to other industries they get much higher salaries because all the contractors are happy to pay them and even in the remote areas it is very difficult to get labourers.

The Government has also increased the salaries and allowances specially for the engineering skilled personnel. In this budget too the Finance Ministry has increased the allowance by 15 per cent for the Government engineers to ensure that they work with Government. Because the private sector companies pay high salaries for the engineers, it is very difficult to get them to the government sector.

Q: How does the Ministry work towards getting a skilled labour force and qualified people for the construction industry to meet the demand?

A: Having worked in collaboration with the Vocational Training Ministry we have given so much priority to provide National Vocational Qualification certificate that is internationally accepted to train the skilled personnel to make use for the construction industry.

At the moment we have great difficulty in identifying skilled personnel to the construction industry. We even have collaboration programs with the international agencies.

ICTAD, has given priority to train more than 7,500 skilled personnel last year. But still we need skilled personnel for the construction industry. When they pay a bigger salary they maintain a high level of economic development because they reached the middle level income group in the society.

Q: Development of the road network is a fast moving sector in the construction industry. How will this benefit the country and its masses as a whole in its march towards prosperity?

A: After independence now we see a well developed road network in Sri Lanka, because we didn't have such opportunity in Sri Lanka. Within the past three years after the war, the government has given much priority for the development of roads.

The Economic Development Ministry has given much priority for this and billions of money has been allocated for the highways and road development. Not only that, the rural and provincial road development has also been given priority by the Government.

The road sector as the fast moving programs in the construction industry has all the activities of development. It is carrying forward all development programs forward and enable the people to move fast. As a result all economic activities get faster because of the low cost. The wastage is also very minimal. Whatever they earn they can make use of.

If we take Dambulla as an example, they produce and bring vegetables from Dambulla to Pettah during the transportation. In the past there was a lot of wastage. Now it is not happening. Within a few hours they can reach Colombo and the time waste is so low and fuel and other operational cost is very low because of the well developed transportation system.

In the meantime, physical features of a country is also quite good for the country. When we assess development, we normally get roads as one of the main development indicators to maintain the level of development of a country.

When the country is developed a well maintained road network shows the level of development. Now more or less the entire country has recovered and in the next five years the government has planned to establish another two or three highways. Kandy Highway, Trincomalee, Puttalam and the highways have been planned and they have already been started. Because of that the investors are coming. A lot of investments have been gone to the peripheries without confining them to Colombo.

Q: There is very big competition among the contractors. In this process maintaining quality constructions has also become a challenging part. What kind of mechanism is put in place to maintain the quality and the standards in the construction industry?

A: Yes, there is a very big competition among the contractors to get contracts. Quality-wise they all are maintaining good standards. Even though the standards are maintained by the ICTAD, the University of Moratuwa, Peradeniya and Ruhuna Engineering Faculties and other professional institutions are giving support to maintain the standards. That is already there. Standard Institution is there. The well developed professional agencies like Engineering Institute, Architects Institute, and professional bodies are also supporting them. That is happening automatically as they are happy to maintain the qualities and standards. Private sector institutions have been developed like that but not like earlier. To maintain the competition to get more contracts they maintain the quality and standard.

Q: Major local and international contractors are engaged in many construction projects in Sri Lanka. What are the benefits that we can reach through their presence in Sri Lanka and how is the Ministry encouraging the key players in the construction industry?

A: This is a very good industry that makes money. Very big contractors have maintained a healthy economic situation now. Not only in Sri Lanka but they do all over the world. Some of our Sri Lankan construction agencies are not doing construction in Sri Lanka but within Asia they are active. Companies like MAGA, SIERRA have brought international knowledge to Sri Lanka. The government is not in a position to bring international knowledge. These companies pay higher salaries and they hire internationally skilled personnel and also they bring technology to Sri Lanka. The construction industry really depends on the technological development. All the people are happy to join the modern era. Modern era means the new technology they have adopted. With that knowledge also our engineering personnel develop their capacity not fitting to the Sri Lankan standards but fitting to the international standards.

They use more IT. They use computers and information technology to design buildings and it also support them to minimise the cost and wastage. This is quite good for the industry and also for the country's economic development. Our responsibility of the Ministry is to maintain the standards and qualities in the industry, maintain coordination among the private sector and private sector corporation and professional bodies, universities and with other agencies. In the meantime we do share our experience and give government leadership to create very good construction environment.

While we are felicitating we allow them to develop the industry. In the meantime we have developed construction policies and we are allowing the private sector to move as soon as possible to the industry. In the meantime we do our collaboration with professional agencies and universities.

Then we allow intellectual people to give more support to the construction industry. Now there are hardly more small contractors in Sri Lanka because contractors are getting bigger and it need biggest support to the economy. Because of that it has been developed to fit into the international standards. Then we are giving fullest support to them.

Q: When our construction industry is growing so fast don't you make any effort to bring back Sri Lankan experts in the construction industry employed in the middle East to Sri Lanka?

A: Now it is happening. It has been started. Now they can have a higher income than they have been earning in the middle east. Even engineers get ample opportunities to more salaried jobs in Sri Lanka.

Q: If we talk about the post conflict situation in the country how does the North and East areas benefit from the growing construction industry?

A: At the very first stage, the government has given priority to establish the road network in the North and East and the basic infrastructure. Now they are almost completed in the North and East than in the southern part of the country. Public feeling is that the North and East is getting larger benefits than the people in the South. That is natural because the Government was forced to go there.

It is happening now. Almost the entire area there is well established with road network and bridges. Even after 34 years and 44 years after independence we didn't see such huge bridges in the Northern and Eastern part of the country. Now basic things have been established and the only thing now is housing construction which sector is also developing now.

In the Eastern part of the country we see the biggest development in the tourism industry. All the biggest tourist companies have taken over the lands and the hotels are being constructed now.

The areas facing the sea in the Eastern province is so valuable for the tourism industry. Now actually the biggest construction boom is going in that area. Because of that, there is a shortage of labourers and shortage of skilled labourers.

They have taken to the North. Very recently in Ampara they have caught one Indian person who had come to Sri Lanka taking tourist visa and he has been working there as a machine operator. That type of opportunities are there in the East because opportunities are there.

Q: Does that mean do we need to get labourers for the construction industry from South India or any other country?

A: No. We are not going for that. Our skilled and unskilled labourers are there in the middle east.

They have gone to the middle east due to economic difficulties. Now over 1.5 million are employed there. There is a better situation in the country and they can come back. Now it is gradually happening. But in the meantime all the youth male and female are happy to join for the employments in the construction industry.

Q: For a fast growing construction industry we need building material. How do we manage to get those building material and control the quality of the material?

A: The qualities are maintained by the ICTAD and Sri Lanka Standard Institution. When the construction industry is growing, we need building material.

We are importing iron and cement the key material for the industry.

Q: When the construction industry is growing so fast, there will be problems unless there is proper planning in the construction industry. How does your Ministry tackle this situation?

A: Based on economic infrastructure development the President has declared the national physical development plan for the next 20 years until 2030.

That also effected to the growth of the construction industry. After Independence we had not developed a national physical development plan. Now it is already there.

It is expected to maintain the integration development of Sri Lanka. It is also very clear path for the development process in the country. It is actually done by the National Physical Planning Department in our Ministry guided by Minister Wimal Weerawansa and National Operational Committee headed by the President.

Q: Are there plans to produce much demanded building material locally and introduce low cost construction technology?

A: Already such things are being done by the Coast Conservation Department to use the sea sand for the construction industry.

In the meantime we are introducing low cost technology. Because our corporation SEC and SD&CC having collaboration with the Moratuwa University try to develop low cost construction technology, because we can't afford the existing construction methods. 2500 years ago we had very good construction system in this country.

One is low cost housing construction technology and the other one is the green building system to make it open for the air and open for the natural environment.

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