CIOB praises Prime Minister’s support for construction contractors

The Ceylon Institute of Builders (CIOB) wrote to Prime Minister Mahinda Rajapaksa informing him of the current financial

Prime Minister Mahinda Rajapaksa

CIOB President Dr. Rohan Karunaratne

predicament encountered by local construction contractors under the present economic climate, emphasising the issues and problems that are constantly faced by construction contractors are aggravated by the outbreak of COVID-19 pandemic and due to other global and local economic factors, listing them in an annexure. 

CIOB also acknowledged the fact that state sector projects largely contribute to keep the local construction industry alive and continue to provide a constant work flow to local contractors. Within this concept, CIOB say that they have persistently noted that certain provisions in standard forms of construction contracts applicable and pertaining to state sector projects are not in the best interests of the project and its major project stakeholders.

According to the Institute, this is not due to the deficiency of the contract or its constituent provisions contained in standard forms, but due to their constant application as a generic practice in these peculiar economic circumstances.  

Hence, CIOB President Dr. Rohan Karunaratne, to address concerns of members of CIOB and other industry associations and chambers, have has the following as concerns requiring immediate policy level decisions: 

1. Consider determination, certification and payment of price fluctuations in accordance with CIDA stipulations for contracts where no price fluctuations apply. Further, allow a review and adjustment of existing fluctuation clauses where significantly cost escalated items are stated in the contract as non-adjustable items in the CIDA formulae. 

2. Waiving of liquidated damages imposed on State level contracts for the last three years in whole or in substantial part. 

3. Expediting the process of granting and approving time extensions, in consultation with consultant engineers and internal decision makers. 

The private sector is also requested to consider these conditions, in light of the current climate. 

Prime Minister Mahinda Rajapaksa, upon receipt of the CIOB’s letter, made arrangements to forward the same to relevant authorities such as UDA, RDA and others for their attention and necessary action. CIOB, including its Chairman Dr. Karunaratne, on behalf of all the stakeholders of the construction industry in Sri Lanka, thanked the Prime Minister Mahinda Rajapaksa for taking prompt action on this matter vital for the construction industry and through that, to the national economy.