The Ceylon Institute of Builders (CIOB) wrote to Prime Minister Mahinda Rajapaksa informing him of the current financial predicament encountered by local construction contractors under the present economic climate, emphasizing 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 workflow to local contractors. Within this concept, CIOB says that they have persistently noted that certain provisions in standard forms of construction contracts applicable and about 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 general practice in these peculiar economic circumstances.
Hence, the President of CIOB, Dr Rohan Karunaratne, has identified the following as concerns requiring immediate policy level decisions:
Consider determination, certification and payment of price fluctuations following 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. Waiving of Liquidated Damages imposed on state-level contracts for the last 3 yrs in whole or in substantial part.
Expediting the process of granting and approving time extensions, in consultation with consultant engineers and internal decision-makers.
“We request the private sector as well to consider these conditions, in light of the current climate.”
Prime Minister 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, wish to thank Prime Minister for taking prompt action on this matter vital for the construction industry and through that, to the national economy.
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