A proper regulatory mechanism should be in place before entering into foreign trade agreements, Construction Industry Chamber Secretary General and CEO, Nissanka N Wijeratne said.
“As per the ETCA agreement and FTA with China, the construction sector will opened out to a certain extent. But the problem is although the Construction Industry Development Act was passed in 2014 not a single regulation under the Act has been passed. Without regulations the provisions of the Act cannot be implemented,” Wijeratne said.
“If free trade agreements are signed and the sectors are opened without regulatory mechanisms, it will be a free run for those companies and it applies to even other sectors. Anti dumping we still don’t have a law, so if those things are implemented then of course there is no harm opening out and getting benefits from those agreements. Otherwise it will be dangerous” Wijeratne opined.
The industry is also marred with other burning issued such as the shortage of labour especially for projects in Colombo and once the rain sets in the problem will get much severe because the employees will go back to farming. The next burning issue is the scarcity of sand. The sand price has increased to Rs 16,000 per cube and the chamber has been pressing for as alternative of river sand the government should facilitate supply of washed and sieved sea sand. The Muthurajawela plant alone cannot supply the total requirement of the Western Province at least another two parties must be allowed to pump sea sand.
Although the chamber agrees of banning river sand mining there must be an alternative, he said.
The government has not intervened to solve this problem he said.The promise to provide sieved sea sand from January 1 too had not materialised yet he alleged.
Constructors in Colombo alone need 8 million cubic meters of sand he said.
Also there is a shortage of crush rock in the industry and there are delays in obtaining permits. he said.
The last budget has also heavily burdened the construction Industry with taxes and also imposed a 5% withholding tax on contractors. After protests the government has revised it to 2.5% but it has not yet been gazetted he said. Wijeratne said the Chamber feels that it should however not be more than 1%. On top of that a 2% NBT has been also levied on Contractors he said. This will increase the overall construction cost due to snowballing effect by 5% he alleged.
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