Friday, April 22, 2016

Construction industry builds case for foreign labour

From The Daily FT - By Shehana Dain 

As Sri Lanka attempts to become a Foreign Direct Investment (FDI) hotspot, top construction industry experts yesterday warned the sector is ill-equipped to absorb inflows due to a growing labour shortage.

Noting that the industry would find it extremely difficult to grow at a fast pace in the next few years, the Chamber of Construction Industry (CCI) of Sri Lanka cautioned the labour shortage would be highly visible once development projects planned by the Government got into full swing.

CCI Vice President D.D. Wijemanne believes that even though the Government has agreed to not allow Indian and Chinese workers into the system due to major public disapproval, the construction industry is in dire need of foreign labourers.

“Right now there is a huge shortage of both skilled and unskilled labour because people are not willing to join the industry. Companies are facing severe problems to get work done and as a result some of them have already obtained permission to get Indian workers in small numbers on one-year visas. This has to continue and expand because when the Government begins projects such as the Megapolis and Port City, this shortage will be untenable. However, the Government does not want to admit this openly,” Wijemanne said.

As a solution to the looming labour shortage, the Government has set aside a budgetary allocation of Rs. 500 million for an apprenticeship training program.

CCI CEO Nissanka N. Wijeratne commended the move and elaborated further saying 10,000 trained personnel would complete the training program by the end of 2016.

“The program has partnered with over 100 leading construction companies to train 10,000 youth by the end of 2016. We proposed to the then Government about six years before to have special programs because the youth are not keen to join this industry but we got a zero response. Carpentry and masonry were introduced to the school curriculum only last year. However it will take some time for us to reap this benefit. The problem is, we are running out of time.”

Another hindrance is the Construction Industry Development Act, which was described as ineffective, much like a ‘mouth without teeth’.

Stressing that for the Construction Industry Development Act to be efficiently implemented it needs certain regulations to be passed in Parliament, CCI said that there were at least 25 regulations which needed speedy implementation.

“Contractor registration should be mandatory. The Construction Development Regulatory Authority (CIDA) has been doing it since the 1970s as administrative authority but it is not ratified by law. One cannot simply just do this by issuing circulars anymore; it has to be implemented legally.”

According to reports compiled by the Department of Census and Statistics, the contribution to GDP from local construction increased to Rs. 95,189 million in the fourth quarter of 2015 from Rs. 89,090 million in the third quarter of 2015. GDP from the sector averaged Rs. 47,012.86 million from 2002 until 2015, reaching an all-time high in the fourth quarter of 2015.

Build Sri Lanka Housing and Construction Expo in May

The Chamber of Construction Industry (CCI) will kick off its 12th consecutive Build Sri Lanka Housing and Construction Expo from 13-15 May.

For the first time ever, the Sri Lanka Army engineers are expected to demonstrate their services at the exhibition.

The three-day exhibition will have over 300 stalls this time around and a large number of visitors are expected. According to CCI, visitors will get a very rare opportunity to see their demonstrations.

The exhibition will comprise building and construction materials, furniture, interior decor and landscaping and outdoor living, tools and equipment, construction and consultancy services, construction machinery and industrial vehicles as well as overseas exhibitors.

90% environmental damage already caused by Port City 

The Chamber of Construction Industry (CCI) said the controversial Port City project had already caused 90% of environmental damage by April 2015 when the newly-elected Government suspended the $ 1.4 billion project.

Noting that the Coast Conservation Department (CCD), the regulatory body responsible for compiling the Environmental Impact Assessment (EIA) report, had acknowledged the concern, CCI Vice President Mahanama Jayamanne said this left no other choice for Government officials apart from rejecting the largest FDI deal in Sri Lanka’s history.“The real situation here is that the land extraction and filling with regard to the Port City will only be up to the breakwater of the Colombo Port. At the point of building the breakwater if there was any damage to be done, we witnessed that already. We believe 90% of the damage has already taken place.”

However he noted that there were many complications yet to be addressed by the Government in a timely manner following the Cabinet nod given for the project to resume in March this year.

“Even after this, we saw many complications including access, wastewater removal and power supply. These matters should be solved. When a project of this magnitude kicks off, many buildings will come up and there will be high demand for water. All these should be discussed by the relevant authorities,” he added.

The Chinese project was billed by the previous Government to attract an estimated $ 15 billion in investment once it was fully completed.


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