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Local contractors agitate against Chinese dominance
View(s):Sri Lanka’s contractors have expressed concern over Chinese dominance in construction projects here, and Government efforts to preclude the local trade from participating even in basic tenders.
One example they pointed to was an initiative to rehabilitate high priority roads and bridges in the Northern and Eastern Provinces, advertised in January last year by the Ministry of National Integration & Reconciliation. The roads were divided into six packages ranging from 85 km to 1,146 km. The project is under Prime Minister Ranil Wickremesinghe.
“These packages have all ‘C’ and ‘D’ roads,” said Brig. Madura Wijeyewickrema, Chief Executive Officer of Major Constructors of Sri Lanka and of the National Construction Association of Sri Lanka. “They are provincial roads. But they have taken 5 or 10 km here, 8 or 6 or 4 km there and packaged them. After that, pre-qualification is given for billions of rupees.”
“Then, which Sri Lankan company can qualify?” he asked. “These are roads that even our village contractors—regional small or medium contractors—can make. But because of this, they can’t benefit.”
The Sunday Times reported last year that proposals were invited through international competitive bidding with 100% confirmed financing for six packages to rehabilitate roads in the Northern and Eastern provinces. Forty-four applications were received. A Cabinet appointed negotiating committee and a project committee evaluated the proposals.
Two packages (1 in the North and 1 in the East) were awarded to Sinohydro Corporation Ltd. The others went to CEC-NEM Joint Venture, KDA Weerasinghe & Co Pvt Ltd, Consulting Engineers & Contractors Pvt Ltd and Nawaloka Construction Co. Pvt Ltd. Sinohydro Corporation’s package in the North was later withdrawn in favour of an Indian party, on a request conveyed to the Government through the Indian High Commission in Colombo.
Brig. Wijeyewickrema has publicly decried the “infiltration” of Chinese companies into the local trade, saying they initially “crept in” via International Competitive Bidding (ICB). They soon ousted the Japanese and Koreans in that area.
“Whilst doing ICB jobs, they saw a golden opportunity during the second innings of the Rajapaksa Government and started bringing in negotiated jobs or unsolicited proposals,” he said. “Then they observed that we were having fairly sizeable jobs in the private sector and got in there through projects such as Pearl Hotel, Havelock City and Odel.”
The Brig. also claimed that Chinese contractors had a 40% advantage over the local trade, because they did not pay taxes and their workers were only paid an allowance, with their salaries being settled abroad.
“If we say Rs 100, they can do it for Rs 60,” he said. “We are not on equal terms. These are all our jobs. They’re eating into our pie. And we can see they are now trying to come into the housing sector. If they get into that, companies that have been building homes are finished, because they will undercut the prices.”
The CEO also flagged another phenomenon, where small teams of Chinese workers are going door-to-door offering services. “They come on holiday as tourists, with a few tools, and they don’t go back. Five or six of them come in a set and they live in Chinese dormitories or homes,” he said
The Sunday Times spoke to a landed proprietor in Wellawatte, who said he had hired a Chinese worker only that morning for a daily wage of Rs 2,500 for all manner of jobs around the property, including plumbing, masonry and cutting of branches. “He came sharp at 7 a.m. and works till 6 p.m.,” he said, adding that he was very happy with the level of service.