Relax exchange control - Construction firms

By Lalin FERNANDOPULLE

Stiff exchange control procedures inhibit construction companies to compete and secure overseas bids, said Chairman Hydro Power International (Pvt) Ltd., and former Senior Lecturer, Faculty of Engineering, University of Moratuwa, Dr. Nishantha Nanayakkara.

He said exchange control procedures for Sri Lankan companies carrying out projects overseas should be relaxed and made more business friendly to enable more companies to secure foreign bids.

A large number of engineering companies in the construction hydro power, IT and manufacturing sectors have secured bids competing with renowned international companies.

Sri Lankan engineering companies have undertaken mega construction projects in the Middle East and in Africa. Overseas Sri Lankan companies make a significant contribution to the inflow of foreign exchange to the country.

Foreign remittances from migrant workers account for a major share of the country’s foreign exchange earnings.

Dr. Nanayakkara said that Sri Lankan hydro power construction companies are globally recognised and added that there is enormous opportunities for local companies to undertake projects overseas.

“Stiff exchange control rules and bureaucratic procedures make Sri Lankan engineering companies less competitive in securing international bids for projects”, he said.

Currently a performance bond can be obtained only up to $ 50,000 without exchange control approval. Dr. Nanayakkara said that there should not be a limit for exchange control approval and added that there should be a clear path to repatriate money and send working capital for overseas projects.

He said that foreign companies in Sri Lanka have no restrictions to remit money to their countries.

The government should encourage companies bidding for overseas projects to be on par with India and China.

Indian and Chinese entrepreneurs are supported by the EXIM Bank and government guarantees.Dr. Nanayakkara said that through business friendly mechanisms many countries have developed private sector partnerships.