‘Stopping construction projects will lead to hyper-inflation’

Whilst agreeing with the facts and figures presented by the governor of Central Bank Dr. Nandalal Weerasinghe in his speech made at a parliamentary seminar the Construction Industry however reiterate that, stopping construction projects by the Government will lead to hyper-inflation and may bring back people to the streets, President, Ceylon Institute of Builders, Dr. Rohan Karunaratne said.

He said that Dr Weerasinghe also, addressing a seminar for parliamentarians, spoke on the fact that hyper-inflation may bring back people to the streets. “We too echo this feeling and agree with the facts and figures presented by the governor in his speech. The decision by the Government to stop construction projects will also lead to the same scenario where people who, without means by which to feed their families, will flood the streets pleading for their livelihood,” said Dr. Karunaratne with over 30 years of experience in civil engineering

This is given the fact that the construction industry employs people from all hierarchies of society, but especially because the majority of this includes some of the poorest labourers in the country. The Government has stopped construction projects without settling contractors’ bills. The total amount due is over 130 billion, while contractors owe banks around 200 billion and the ordinary interest has skyrocketed to 25-28% and TOD limits are over 30%, both of which contractors cannot bear. They now have lost the luxury of lending and paying their workers.”

The Construction industry is one of the major sectors which contributed around 10% of the GDP. And in 2020 it will contribute more than 300 billion to GDP. There are over 1 million people involved in the industry. The construction supply chain is easily one of the largest in Sri Lanka and includes around 4,000 SME including sand suppliers, rubble suppliers and brick makers.

“In short, Construction companies have been crushed under the boot of high bank rates and unpaid government dues, leaving them unable to take care of their vast workforce and supply chains. Thus, as the governor advised the parliament, Contractors in turn advised the Governor that unpaid dues to contractors may lead to 100s of 1000s of unemployed labourers and workers flooding the streets pleading for their survival. Contractors shall not be held responsible for this crisis,” he warned.