Short term moratorium proposed for construction industry
The construction sector which is in distress due to not receiving over Rs. 200 billion from the government requested the banking sector to consider a moratorium on them.
Chairman Ceylon Institute of Builders Dr. Rohan Karunaratne said that today the industry has to receive over RS. 200 billion as payments for projects they have completed for the government sector. “This is due for nearly three years and the present government has promised to pay Rs. 40 billion from this,” he said.
Speaking at the CIOB organized the seminar on “Resolving Current Issues in the Construction Industry”, which was held at Sri Lanka Foundation Institute, Padanama Mawatha, Independence Square, Colombo 7 he appealed to both the bankers and some of the foreign Embassy representatives to consider offering them a moratorium. Nearly 2.6 million stakeholders including architects, engineers, contractors, suppliers, quantity surveyors and manufacturers depend solely on the Industry. “This industry and its contribution to the GDP has since then fallen to a range below inflation and we badly need a bail out package.”
Outlining the objectives of the seminar he said that the purpose of the seminar is to discuss the major issues faced by the construction industry with the Banks on outstanding payments for works done on state sector projects and bank’s reluctance to provide overdrafts and other facilities to the industry.
Dr. Karunaratne said that they will also make an appeal to the donor community to provide a ‘soft loan’ to Sri Lanka towards sustaining the construction sector. The leading bankers who were present at the event said that the banking sector too is facing some pressure due to mounting non performing loans as well as high interest rates. However the banking sector officials said they are likely to consider offering a ‘short term moratorium’ for the construction sector as they understand the issues faced by them.
The Keynote address was delivered by Dr. Nandalal Weerasinghe, the Governor, Central Bank of Sri Lanka who said that they fully support moratoria for the construction sector provided the bankers approve this scheme. Prof. Chitra Weddikkara said that they were very happy with the outcome of the event as now they can expect ‘something positive’ to the industry for its survival.