SL can earn USD 1-1.5 Bn from export of construction services
Sri Lanka can generate about USD 1 to 1.5 billion per year from export of construction services, opined Engineer Nissanka N Wijeratne, Secretary General/CEO of the Chamber of Construction Industry of Sri Lanka. (Pictured)
Speaking to Daily News Business he said there is a strong growth potential in the area of promoting the export of construction services but then again there were some issues to be addressed by the government and they have forward a report in this regard to the Presidential Committee for the Revival of the Construction Industry chaired by Chief of Staff to the President Sagala Ratnayaka .
“If our companies are to undertake contracts abroad we have to get bank bonds and guarantees in dollars and at the moment there is a difficulty in getting bonds and guarantees and even if they give there is an issue of non-acceptance by foreign clients because of the rating downgrade. So we have to get it counter guaranteed by an international bank but now international banks are not counter guarantying. So as a solution we requested the government to negotiate a counter guarantee facility with ADB for about $ 500 million, so that our banks can get a counter guarantee from the ADB.
He said they suggested that initially at least 20 companies be promoted to go abroad and give them the bank facilities with the condition that those 20 companies will have to take at least one subcontractor form Sri Lanka which means 40 companies and once they get established they can get more companies overseas just like South Korea did.
Wijeratne said that at the moment the Central Bank has restricted giving guarantees to companies to the limit of only USD 1 million. This is not enough and the companies require that to be increased to at least USD 10 million depending on the size of the projects available. The other issue is that some countries especially in the Maldives want a small investment as a mark of commitment to offer a contract. At the moment this is not allowed. Some companies who have earned from earlier contracts and have some funds and can invest those funds for this show of confidence too have been disallowed to do so by the Central Bank now. He said that they have made submissions to the government and if those things can be corrected the construction industry can generate about USD 1 to 1.5 billion per year from export of construction services.
Wijeratne said the three meeting with the committee headed by Sagala Ratnayake was quite fruitful and now most of the outstanding payments to the construction industry have been paid by the issuance of government bonds for companies which had more than Rs 50 million outstanding which they have already discounted to banks and received cash. He said however there was still about Rs 100 billion and some are on the foreign funded projects which foreign donors have suspended and from the Consolidated Fund there is about another Rs 40 to 50 billion to be paid. He said the government said by June they will settle that in cash, however the contractors who are on a foreign funded projects until the donor issue is sorted there can be a delay in receiving their payments.
BuilSL Expo from May 26-28
BuildSL Housing and Construction Exhibition will be held for the 18 th consecutive year from May 26-28 and the exhibition is held despite numerous problems to generate some confidence in this industry and its stakeholders under the theme ‘We Can Build Sri Lanka. This year there will be nearly 200 stalls and all stalls have been sold out.
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