CIOB gathers with industry stakeholders to bring down construction cost in Sri Lanka

Institute of Architects, Institute of Quantity Surveyors past President Prof. Chitra Weddikkara

CIOB President, NCASL past Chairman and CCI Vice President Dr. Rohan Karunaratne

Institute of Quantity Surveyors past President Ch. Qs Lalith Ratnayake

In the recent discussion held with President Ranil Wickremesinghe at the time of handing over the Construction Industry Roadmap, the topic of construction cost in Sri Lanka was discussed very seriously. There is a huge cascading effect of high construction cost. For example, within given budget restraints restarting projects is difficult. FDIs are also reluctant to come to Sri Lanka due to high construction cost; funded projects cannot be completed within allocated funds; everyday house builders and commercial/apartment projects, etc. have also been abandoned due to abnormally high construction cost. 

Therefore CIOB came forward to discuss with architects, engineers, contractors and material suppliers to discuss how to bring down this abnormal construction cost in par with our neighbouring countries. It was identified that even from the initial design stage, over-designing; imported materials used by some architects; unregulated and costly unusual designs, construction cost increases. For contractors the issues boil down to wastages, poor management and poor decision making. 

Such factors have led to a 24% increase in construction cost, which is clearly preventable, for example by using LEAN methodologies and local materials. Sri Lankan construction cost is significantly higher than that of India, Malaysia, Vietnam, Thailand, Bangladesh, Manila and other such neighbouring countries, which disrepute Sri Lanka as a developing nation. 

When it comes to material suppliers, CIOB discussed abnormal price hikes of materials and prevention methods to reduce these. By identifying and targeting the causes of such price surges, for example due to taxation, foreign exchange prices, transportation, electricity, fuel price, shipping cost, etc., these could be mediated by methods such as Government aid. Encouraging the manufacturing and utilisation of local materials is essential in this endeavour to reduce dangerous price hikes. To this extent it is also necessary to deal with the bribery, commission and harassment culture among some bureaucrats, which further inflames this problem. 

If this is seriously considered and dealt with and cost reduces by 24%, we can compete with our neighbouring countries. Thus we can restart halted projects, FDIs may come in, funded projects can resume, apartments and commercial projects shall re-commence and in short Sri Lankan development can continue. 

CIOB will soon be officially announcing new, competitive construction cost in par with our neighbouring countries, together with the stakeholders of the Sri Lankan construction industry.