We need Colombo Port City - Dr. Surath Wickramasinghe

by Ranil Wijayapala

President of the Chamber of Construction Industry in Sri Lanka Dr. Surath Wickramasinghe says the Government should maintain the progress the country achieved in the construction industry during the past few years by expediting the process of reviewing the mega development projects, as delays in the process will make a bad impact on the construction industry.

In an interview with the Sunday Observer Dr. Wickramasingha insists the Government should keep the confidence of the foreign investors without arbitrarily halting the ongoing projects as there are so many foreign investors who are closely observing the situation here in Sri Lanka to make their investments. He also says that a project like Colombo Port City is needed for the country to attract investors, as such projects can have the capacity to provide state-of-the-art technology in a limited area.

However, he also emphasises that the Government should make it a pre-requisite to get portions of such mega projects for the local consultants and contractors for the local construction industry to benefit from those projects.

Q: We saw a steady progress in the construction industry in the country a few years after the end of the conflict. Do you think there was a negative impact on the construction industry after the change of government in January this year?

A: Although there was very little happening in the construction industry soon after the end of the internal conflict because investments took time to come a few years later the construction industry had steady progress with many development projects taking place. Chinese are the people who came to our rescue and they gave us loans. Nevertheless, they were the only people who actually helped Sri Lanka at that time. That created a momentum for other investments like Shangrila hotel, ITC Colombo and TATA project to come in. Colombo beautification also came with the Ministry of Defence and Urban Development. That helped to transform the country from a war situation to a different perspective. As a result the construction industry recorded a growth rate, according to the Central Bank, averaging about 7 to 8 percent. The construction sector growth was going around 20 and 23 percent. That was very healthy. That is what happened after the conflict.

After this government came in, some of the projects have been going on without any major problems, but at the same time the big projects such as the Port City project is now on hold until the reviews are done. Several other infrastructure project such as the water sector, UDA housing projects as well as the Tri Forces headquarters project, are going on but still the funding is not coming as required. This is the unfortunate part of the exercise. We don't know whether the continuity of the progress of the construction industry can be maintained with the reviewing of the project. But if they are reviewing the project very fast jobs can brought back on track.

Q: Do you think these reviews are essential at this moment?

A: According to the present Government, the projects are overpriced. That may be true. They want to see whether that is actually true or prices can be brought down. That is happening in several projects. On the road projects like Outer Circular Highway, the Government said the price of the contract was reduced by US $ 30 million. Unfortunately, the Northern Expressway which is very needed at this time, is also being reviewed at present. These reviews are ok but they should be done speedily. The Chamber of Construction Industry has all the resources; quantity surveyors, architects and engineers in different disciplines and we can easily help the Government to fast track the review process but so far nobody from the Government has reached us.

Q: The Colombo Port City project has come under severe criticism by various segment of society and it has become political and diplomatic issue in Sri Lanka now. Do you think it is an essential project for the country?

A: I also had the feeling that we don't need this when so much of land is available in the Colombo area, why should we go in to the new development for the port city. I also studied the proposal by the former UNP government where they also wanted to develop a land according to the Singapore plan called CESMA. It also had a similar development in the sea. Although I was against the Colombo Port City project, once I studied it found that there is no major I problem of doing it because some of the countries like Singapore and several Middle East countries have filled the sea and created islands. According to hydrological scientists this is safer to do due to the construction of the Colombo South Harbour. The other fact is that the sole investment is coming from foreign.

They are responsible to bring in foreign investment for the construction of other buildings inside according to media reports. This will be a huge boost for the country and for the people of Sri Lanka at no cost. When you look at the project at that way we can't see any danger in this.

Q: Was there any study to check whether the Port City project is fitting to the future Colombo city development plan?

A: I think it is fitting to the Colombo city. I think there is a new proposal to bring an expressway along the Colombo port, connecting it to the other expressways we have.

So that comes directly into this complex. Therefore, it won't interfere with the movement of the traffic in other areas in Colombo. That won't make it more difficult for us to get about because the expressway will get the fast traffic out into the Airport Expressway and Outer Circular Highway to the South and to the North. Don't forget the fact that these people will come here and invest money if they don't make on their own study.

Q: Should there be a study from our side to look after our interests also. Do you think this has happened?

A: There should be study to look after our interests. There should be financial benefit for Sri Lanka. There is definitely a benefit from the project.

Q: Do you suggest any changes to the Port City project?

A: No detailed designs of the project has been done and that will happen at the next stage of the project. Even the UDA has not seen the drawings to see what they want to do. So it is very difficult to comment on a thing that is not been done. Once it is done we can comment. The construction industry is hoping that some of the contracts will come to the locals. Otherwise there is no benefit to us from the project.

Q: Without having any detailed planning of the project is it correct to commence the reclaiming of the sea?

A: When the land is filled the sub structure work is different. Therefore the piling and various other things will happen after that. Therefore, that had no bearing on the piles and the weight of the building. Piles will take the weight of the building. Therefore there is no harm in developing the infrastructure part.

Q: Do you agree with the costing of the project?

A: Actually the costing of the project does not arise for the Sri Lankan Government. Whether it's a 500 million dollars or whether it is one billion dollars project that doesn't affect the Sri Lanka government because it is not Sri Lanka government's money. It is a foreign investment. That is what Sri Lanka needs and this is the biggest project Sri Lanka has ever got.

Q: You have mentioned in a letter to the Government that government should keep the confidence of the investors. Do you think that we should risk our national interest, security issues and other related issues to maintain the confidence of the investors towards us?

A: The business confidence is a different thing and national concerns are different. I don't think that there is any danger in giving 500 acres land for a foreign investor because the countries such as Australia and various other countries are also asking the Chinese to come.

I can't see a physical danger that they can come and land submarines in a small land area like this.

When you study the project I don't see any danger from this project. The risk is whether the investors will come. Otherwise they will just fill up the land and it will be another Galle Face Green.

What is important is that the government must make sure that the Chinese company will get the investors that they have indicated.

That will be a smart city with the latest technology. Otherwise the investors won't come. The other investors will not come if the latest technology is not available here. In our part of the country we can provide all those facilities. In a small area such as this we can provide the latest technology.

But the business confidence is different. If you stop projects arbitrarily then the investor will wonder what is happening, because the investor has already commenced the project and you are stopping the project for review like the Chinese project and so many other projects.

While you are reviewing the project let them continue. There are so many other investors on the pipeline to come in. Therefore we must not discourage them to come in. We must not stop projects.

Q: What is the impact on the construction industry due to this reviewing process?

A: Lot of contractors who are members of our chamber have got huge commitments not only to the banks but also to the employees. Since their projects are stopped they have to answer. They have to retrench the staff.

And if they retrench the staff the whole objective of maintaining a growth rate in the construction industry and its move forward will hampered.

Q: When we come to the expressway projects they are also temporarily halted for reviews saying that they are overpriced. Do you agree with these criticisms?

A: As I said earlier, I have not studied anything but our chamber has the necessary resources to check whether these things are above the market rate or at reasonable cost. But we do not know the basis how they have costed those projects because that is the duty of the government. But the way forward is to make sure that it is not overpriced. In such an event it is good to review, but the review must be fast.

Q: The city beautification projects initiated during the previous regime was given much publicity. Do you thing those things actually happened?

A: Actually it has really happened and it is also happening because it is a World Bank funded project.

Therefore the World Bank will make sure that we will continue with the original design and original plan with present government also.

Q: Is it necessary to have such projects in the long term process of city development?

A: Definitely. Any investor coming to Sri Lanka today gets a very nice and comfortable picture about the city. If our good roads and pavements are good then the waterfronts are very evident; that is an impetus for the foreign investors to come. If you identify the important locations and give them necessary infrastructure, automatically the city of Colombo will improve. We must continue with the same plan.

Q:There are criticisms over the Urban Regeneration Program implemented by the UDA, that it has not been properly discussed before implementation. Do you think this is good precedent?

A: The Urban Regeneration Plan is what the Colombo city requires urgently. Fifty per cent of the city is full of underserved building with shanties and warehousing and similar buildings occupying prime lands in the Colombo city. The Slave Island property is also like that. We were the first to start Panchikawatta triangle development. It is an urban regeneration project but unfortunately not many people understood what the urban regeneration is about. Even the UDA did not understand it. As a result, awareness was not there.

The need to relocate people in good accommodation and liberate the lands that are encumbered with slums and shanties and then transform the area is urban regeneration. Slave island project is such project. Don't ask me about the agreements and the procedures how they have adopted, but I think it is an excellent proposal and that location is only 400 - 500 yards from the sea. If you liberate the prime land then you get apartments coming in better quality is good. What I think UDA is trying to do is to relocate the people. So that is the way forward. Without relocating the people you can't take their lands.

Q: But do you agree with aribitrary implemention of development projects?

A: They are not doing it arbitrarily. If you go and acquire small parcels of lands and do this type of development that is bad. But what the UDA has done is a comprehensive development like what we were trying to do at Panchikawatta. But I am not agreeing with the fact that you have high end apartment and the slums together. What we propose is shift the slums to a different area and then develop the area on a proper basis.

Q: The awarding of contracts for the development projects have come under severe criticism. The unsolicited awarding of tenders for the projects has had a bad impact on the construction industry. How has this procedure affected the construction industry?

A: The procurement procedure in Sri Lanka is really questionable. Normally what happens is they call somebody and give it to them. There is no transparency in such a system. Therefore we have to bring in transparency into this process. It is a very vital aspect we have to address.

I think the Government is thinking of setting up a procurement procedure. But I am not going to say it is going to be perfect. Again they should consult people like us. We know how to implement a proper procurement procedure. Then they can accept it or reject it. They can talk to us. The problem is that they try to do everything themselves without listening to the experts. If they make a procurement procedure applicable to all the projects, it must be a workable thing so that we won't jump into the problems we are having now.

Even if the projects are given on unsolicited basis, first they should advertise it and then if there is nobody to take it, they can give it to somebody, because everybody cannot do mega projects. They should have financial and other resources to undertake those projects. Only foreign firms have such resources. The other contractors should also be given an opportunity to bid for the tenders. We must have a very pragmatic policy. But at the same time there must be disciplines and procedures and it should be transparent and everybody must have the opportunity to participate.

Q: Sri Lanka mostly depends on national agencies for funding for development projects. In most of the cases conditions are laid down that the contracts should go to donor countries. Do you think this is a favorable situation for the local construction industry?

A: I think most national funding agencies like JICA and USAID have their own protocol. They have a basis for awarding.

When we ask them why they bring foreign consultancy and contractors when these projects can be done locally, they say is the blame should go to our financial organizations who are visiting those countries to sign these documents.