'Mega projects: Review should be concluded speedily'
In fairness to contractors, if work on mega projects is suspended, as
has been proposed by the Government, re-mobilisation of the project will
be a costly exercise. Thus, it would be in the best interests of both
parties to ensure that the review process is concluded speedily and
efficiently, Chamber of Construction Industry, Sri Lanka, President Dr.
Surath Wickramasinghe said in a letter to the Government.
Extracts from the letter.
CCI President Dr. Surath Wickramasinghe
"The Chamber of Construction Industry, Sri Lanka (CCI), is the apex
body of the construction industry. We submit the following regarding the
current status of the construction industry in Sri Lanka, in particular,
the move by the Government to review the procurement process followed in
connection with several ongoing, awarded and proposed construction
While reviewing the procurement processes followed in connection with
Government awarded projects, the preservation of the business confidence
which Sri Lanka has so far achieved, with foreign and local investors,
Taking a cue, from the Government's 100-day program, the impact to
the construction industry, and the sector as a whole should be carefully
examined during the aforesaid review process. There must be a fast track
review, and the least sensitive projects should be allowed to proceed,
especially those projects that have been awarded to local developers and
contractors, either exclusively or with Government agencies and foreign
Reviews are to continue for the Colombo Port City Project, funded by
the Chinese Developers, the Mixed Development Project by the Indian
Developers Tata, and two other projects - the Southern Expressway
extention from Matara to Belliatta, and the much needed Northern
Expressway, which is funded to some extent by the local banks and a
sizable portion of the construction work was undertaken by local
contractors, have also been stopped for review.
This type of action will no doubt affect the business confidence of
developers, local and foreign. In respect of the Colombo Port City
project, we understand that there are four compliances to be adhered.
These being, EIA and IEE for the project, (hydraulic landfill and
protection of the city), sand mining for the project, archaeological
impact assessment and finally the master plan and infrastructure.
The first of these has been done and approved by the Coast
Conservation and Coastal Resources Department (CC and CRMD). The second
has been done and awaiting approval from CEA after which
the Geological Survey and Mines Bureau (GSMB) will grant the permit
for mining. The third the Archaeological Impact Assessment has been
carried out by the Archaeological Department itself.
The fourth is for the master plan and Port City infrastructure which
will be implemented when the detailed master plan, is obtained from the
consultants for the project, in around a month's time and the UDA will
be the approving agency.
We are told that there is a school of thought that all these
approvals should be in one comprehensive report. If that is the stance
of the government it is best for the government to request the developer
to prepare a single report at the earliest, including references to the
shortcomings highlighted in the media.
Similar filling had been done already for the Colombo South Harbour
(greater than that of the Port City in size) and in countries such as
Singapore, where almost one third the country is on reclaimed land and
large scale reclamation has been done in Japan, the Maldives, the
Emirates and Oman.
In fairness to the contractors, if work is suspended as has been
proposed by the Government, re-mobilisation of the project will be a
costly exercise. Thus, it would be in the best interests of both parties
to ensure that the review process is concluded speedily and efficiently.
When foreign funded projects are being reviewed, issues concerning
the legality of freehold and lease hold transfers of land in favour of
the foreign entities and persons should be carefully considered. From
the perspective of the local industry, promotion of local entrepreneur
participation at every stage of the project would be ideal.
Import of human resources should be discouraged as far as possible to
promote local recruitment, especially in areas where local talent and
expertise is available.
A few days ago, a journalist of an international magazine from the
UK, interviewed and questioned me regarding the current issues
concerning the ongoing projects in Sri Lanka, and whether Sri Lanka is a
stable economy for British businessmen to invest.
The response given was that the prevailing uncertainty is temporary
and the aim of the Government is to initiate a more transparent system
that would in fact be a boost to investor confidence.
The view was also expressed that after ending the three-decade civil
war, Sri Lanka has a huge potential to be the new growth hub in Asia.
However, in response, the journalist from the said magazine
questioned the reason for the Sri Lankan Government taking unilateral
action against investors (for example the unilateral suspension of the
Port City Project without a fair hearing) without any negotiation,
compromise or discussion. My response to same was that a dialogue would
have been favourable.
The Government must be sensitive towards such views expressed by
outsiders, and the impact on the industry as a result of such unilateral
If the present scenario continues for the next few months, signals
will go to potential investors, foreign and local, cautioning them from
investing in Sri Lanka. This is a serious matter not only for the
construction industry, but, also for the economy.
Therefore, it is crucial that the Government makes a clear policy
statement concerning its decision to review ongoing projects, what the
it aims to achieve, what mechanisms will be put in place to ensure that
the review processes should be transparent and fair and whether the
Government would continue to honour contractual obligations.
In which event, the CCI would advise the Government, that all formal
contracts being legal, such contracts should be adhered as per the
agreements. We are prepared to assist the Government, in any way
possible as there is an abundance of expertise available at the CCI."