External debt restructuring to catalyse construction sector
Sri Lanka’s construction sector is poised for a significant turnaround, driven by the ongoing external debt restructuring efforts. In the recent past bilaterally funded partially completed projects were on halt given the pending debt restructure. Given the successful restructure these projects will resume.
Access Engineering PLC Executive Vice Chairman J. C. Joshua highlighted the critical role of external debt restructuring in revitalizing the construction sector. He noted that the finalization of the debt restructuring process, particularly among bilateral partners, is crucial for resuming stalled projects. “The bilateral debt restructuring promises to bring in close to $2.5 billion into the market, potentially boosting the GDP by 3%,” Joshua opined.
This influx of funds is expected to provide much-needed liquidity, enabling large-scale infrastructure projects to recommence and stimulating economic growth.
Joshua further noted that condominium projects in Colombo and the periphery contrary to rumour were selling out strongly with many leading projects from Trizen to Havelock City only having a few units remaining.
Joshua speaking on information available to him noted that all pending payments to contractors by the government had been made at a panel discussion hosted by CAL Sri Lanka on July 3.
INSEE Cement CEO Jan Kunigk emphasized that lower interest rates, resulting from improved credit ratings, are essential for attracting private investments. He pointed out that significant projects, such as the massive warehouse for Michelin, were initiated even during the economic crisis. “We are seeing positive signs of investment in sectors like petroleum and renewable energy,” Kunigk added, underscoring the resilience and adaptability of private sector players.
ACL Cables PLC CFO Mahesh Amarasiri provided insights into the burgeoning renewable energy sector, which has become a focal point for investment. He highlighted the growing demand for solar energy projects and related products, driven by reforms in the electricity sector.
“The renewable energy sector presents a new market for us, with increasing demand for solar cables and related products.”
He also mentioned that ACL Cables PLC is well-positioned to cater to this demand, thanks to its specialized product offerings.
While the outlook appears promising, the panellists acknowledged several challenges that need to be addressed. The brain drain and shortage of skilled labour were identified as significant hurdles. Companies like Access Engineering and INSEE Cement are tackling this issue through comprehensive training programs and technological advancements to enhance productivity and efficiency.
The upcoming elections and their potential impact on policy consistency also emerged as a topic of concern. The panellists stressed the importance of stable and consistent policies to foster investor confidence and long-term growth. (TP)
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