View from Colombo: Calls for corrective rules in construction industry

Local consultants and contractors badly affected by the ethnic war which ravaged Sri Lanka for about two decades anxiously awaited a boom time to compensate for all their sufferings and losses.

But the much talked about construction boom in the aftermath of the peace talks between the warring factions didn't bring them the bonanza they were longing for years. Instead the policy of giving preference, under the open economic policy, to foreign consultants and contractors in the reconstruction activities has brought them misery.

Many in the construction industry warned that this apathetic attitude, especially in awarding government projects, is sounding a death knell to experienced professionals and contracting talent and expertise in the island.

They complain that a general impression was created by bureaucrats and key advisors to the government and even the Board of Investment that foreign consultants and contractors are cheaper, faster and better than their local counterparts in the island's construction industry.

They also argue that Sri Lankan consultants and contractors, who have now acquired competence in the field of physical planning, urban design, high rise buildings, highway construction, telecommunications and other fields should be allowed to compete with foreign consultants and contractors.

Stringent laws

But local consultants and contractors who have often been commissioned by foreign countries to undertake assignments in the country say that they are second to none and they should be protected and promoted in the same way it was done in many countries in the world where there are stringent laws and regulations and registration formalities to prevent foreign companies from dominating the scene.

According to construction sector officials here, even in India it is mandatory for a foreign firm to collaborate with a local firm.

In this regard many in the construction sector accused the government of openly flouting the very same regulations and the registration formalities enacted by parliament to safeguard the local consultants and contractors.

"We are not totally opposed to foreign consultants and contractors getting involved in local projects. What we are opposed to is offering contracts to little or unknown foreign firms at the expense of local companies. Under the circumstance the most realistic option is the collaboration with local and foreign companies which is bound to help upgrade the local skills and bring about some positive impact on the local construction industry," say many in the construction industry.

Financial guarantee

Citing an example they pointed out of reports that the highway project, linking Colombo and the hill city of Kandy, was to be awarded to a Malaysian firm investing many million dollars without adequate financial guarantee from the government.

"If this is the case it is nothing but fair that Sri Lankan consultants and contractors too invited to compete with foreign counterparts on the same terms" said a leading consultant who pointed out that it is unfair, especially for government establishments such as the Board of investment and the Urban Development Authority, to offer the government projects to little known foreign firms.

He explained that officials may not be aware that the IT has transformed the island's construction industry to be comparable and even competitive with their foreign counterparts.

Thus, they urge the government to involve the Chamber of Commerce and Industry, in negotiating loans for projects, to ensure local participation besides training locals to meet the shortfall in skilled workers and help identify projects for implementation through its members.

Highlighting the need for immediate corrective measures, it was said, otherwise the beneficiaries will not be local professionals, but foreigners whose only interest is to make a fast buck with minimum of effort and maximum profit.

The writer is a Sri Lanka-based journalist