Financial Times - Construction industry slams draft Construction Industry Act

Sri Lanka’s construction industry last week slammed a draft Construction Industry Authority Act saying it was only ‘paying some sort of recognition to the “Mahinda Chinthanaya” without any proper focus on the larger interests of the industry.

This proposed law where no priority has been given to local construction companies in granting government contracts, also reflects continuous perpetuation of privileges to foreign contractors in foreign funded projects, according to a memorandum sent to the Secretary, Ministry of Housing and Construction by the President of the Chamber of Construction Industry Surath Wikramasinghe.

The note has been endorsed by presidents of all institutions and associations of construction professionals including the National Construction Association of Sri Lanka.

Dakshitha Thalgodapitiya, Secretary General / Chief Executive Officer of the Chamber of Construction Industry, Sri Lanka, in a statement explaining these developments said key stakeholders of the domestic construction industry are immediately demanding a new Construction Industry Act instead of the one in the draft stage.

The Chamber has already proposed the enactment of such an Act in which provision could be made for the establishment of a regulatory authority. The chamber CEO stressed that the stakeholders of the domestic construction industry want a Construction Industry Act that is designed to enhance capacities and competitiveness of the industry.

He said the memorandum also states that liberalization of construction and related engineering services envisaged in India’s request list from Sri Lanka under India-Sri Lanka Comprehensive Economic Partnership Agreement has not been addressed as well.

D.D. Wijemanna, President of the National Construction Association of Sri Lanka also expressed opposition to the new draft, saying it was a piece of legislature that would be counterproductive to the development of the domestic construction industry.

In the chamber CEO’s statement, industry stakeholders are demanding that the new Act should address issues such as:

* The contribution of the construction industry in meeting national construction demand and in advancing national social and economic objectives, industry performance, efficiency and competitiveness, improved value to clients, improved industry stability, and procurement and delivery management reforms / improved public sector delivery management

*National initiatives and programmes to ensure sustainable construction.

*Role of construction employment and social amelioration of construction workers.

*Security of payment in the undertaking of construction works.

*Financing of construction related activities in the implementation, operation and maintenance of infrastructure projects.

*Promote, develop and assist small and medium scale enterprises of the construction industry.

*Employment of bona-fide residents of a region in the undertaking of Regional Development Projects.

*National treatment of Construction Service Providers.

*Facilitate more efficient and economical resolution of construction disputes.

The memorandum submitted by the stakeholders has highlighted concerns such as:
*Construction of the Board of Management of the Authority.
*Roles of the Advisory Council
*Appointment of qualified persons.
*Employment of Foreigners as consultants.
* Engagement of Foreign constructors.
* Appointment of Registered contractors.
*Technical Auditing – Absence of a definition of its scope and access to classified information.
*Provision of fee based / revenue generation services by a regulating authority compromising its integrity and independence.

Thalgodapitiya added that the prioritized attention of the government and the stakeholders should be focused on the elimination of major industry growth impediments such as shortage of construction workers, scarcity of essential materials and continuous escalation of costs.