CIOB unveils real cost of construction in Sri Lanka via industry research

 From left: CIOB President Dr. Rohan Karunaratne, BOI Chairman Dinesh Weerakkody, CIOB Advisor Prof. Chithra Weddikkara, and CIOB Secretary Eng. Saliya Kaluarachchi

The Ceylon Institute of Builders (CIOB) has proved that the construction cost in Sri Lanka is now in par with our neighbouring countries namely Malaysia, Indonesia and Bangalore. Therefore, Sri Lanka is in a position to attract foreign direct investment to the projects planned by the BOI.

In the year 2022, there had been a sharp increase of construction costs due to the economic crisis in the country with import restrictions, resulting in material shortages, fuel price hike and substantial increase of freight charges. Hence the prices of a large variety of materials in December 2021 went up by more than 100% and in the latter part of year 2022, some materials such as glass, steel products, etc. went up by more than 200%. Other countries in the region had been recovering from COVID-19 and showed some positive economic growth.

The situation was different in Sri Lanka as the industry declined sharply amidst continuous hits from COVID, economic and forex crisis and associated events. Sri Lankan construction cost skyrocketed as the exchange rate and dollar hikes crippled the already fallen industry. 

When it comes to material suppliers, CIOB had discussions with them on the abnormal price hikes and materials and the possible mitigation methods to reduce cost. CIOB held discussions with President Ranil Wickremesinghe regarding this, at the time of handing over the roadmap for the Sri Lanka construction industry. He directed CIOB to do a comprehensive analysis and comparison on the construction cost of Sri Lanka and its neighbouring countries. 

CIOB then held discussions with architects, engineers, quantity surveyors, contractors and material suppliers on how to bring down the abnormal construction cost. To compile the report on “Building Construction Costs in Sri Lanka”, we gathered senior professionals from the Institute of Quantity Surveyors, Institute of Architects, Institute of Engineers and formulated a critical analysis which proves that Sri Lanka’s construction industry has brought down the construction cost to a much more acceptable, and near-normal rate.  

Given that construction cost skyrocketed in the year 2022, currently the Sri Lankan construction cost has reduced to levels in par with its neighbouring countries namely, Indonesia, Malaysia, Vietnam, etc. Therefore we are now in the range of $ 725-$ 1,000 per m2, and less for other categories.