The present large liability faced by our Government on foreign debt, is hindering the government’s capital investments.
“However we will be determined to invest capital in priority areas of development,” said State Minister of Urban Development, Coast Conservation, Waste Disposal and Community Cleanliness, Dr. Nalaka Godahewa. He was speaking at the inauguration of Build Sri Lanka Housing and Construction Exhibition organized by the Chamber of Construction Industry of Sri Lanka on Friday at BMICH.
He said that the Government has already developed a strategy to settle the loan payments without any default. As such we will settle all debts in a timely manner.
“Consequent to the strain on Government investments due to loan repayments, we are seeking alternative ways of funding vital infrastructure development. In this respect we are seriously looking at various PPP options. The Colombo International Financial City or the more commonly known Port City development is a very good example of PPP project. In this project the Government did not have to spend on capital but attracted private investments to the tune of US$15 Billion.”
“Even with this gloomy global outlook due to Covid – 19 pandemic, our government is striving hard to reverse these trends, These of course are uphill tasks but our leaders have the best credentials for beating all odds and not only taking the country out of calamities but turning around our economy to accelerate the growth.”
“When the economy is growing rapidly there will be a construction boom. In the same vein it is the construction industry that will be affected first, when the economy is not growing well.”
“In our country the contribution from construction sector to GDP which was about 15% in 2011 but got reduced to less than 9% in 2019. This was due to the low economic growth experienced after 2015.”
“We are very mindful that it is a time tested remedy to invest more on construction projects to overcome an economic recession. Even many developed countries had adopted this strategy during past global recessions.”
“With the newly established political stability and as priority projects initiated by our Government, the growth scenario should improve. You are already enjoying the benefits of reduction of lending rate from as high as 14% to 15% to a single digit and guarantees given by central bank to get money from government clients.”
There was a road revolution during the 2005 to 2014 tenure of Mahinda Rajapaksa. In that era, highway sub-contractors were local firms which immensely benefited from the policy.
“However by 2019 foreign contractors account for more than 40% of large construction projects in the country due to policy reversal after 2015. The “Vistas of Prosperity & Splendor” policy statement clearly mentions that state construction work will be reserved for the domestic construction firms.” (SS)
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