Sri Lanka construction sector in deep crisis, govt arrears rise up to Rs150 billion
ECONOMYNEXT- Sri Lanka’s construction sector is in a deep crisis as contractors are in owed 150 billion rupees in arrears on work carried out for the state, head of National Construction Association of Sri Lanka (NCASL) said amid slowing business in construction after the country’s economic crisis.
Sri Lanka has temporarily halted imports of building materials in its latest list of over 300 items from August 23 until further notice.
Some industrial machinery including metalworking machinery, packing machines and ball bearings have are in the list.
“Even though many projects were started during the previous government, due to not being able to complete the payments, the whole construction industry is in a great financial crisis,”Susantha Liyanaarachchi told reporters on Friday (26).
The crisis is mainly because of unsettled due payments by the government to construction contractors amounting up to 150 billion rupees, he said.
“If the government is unable to pay this amount, we ask the government to discuss regarding this and come up with a solution for this issue immediately.”
Sri Lanka’s economic crisis has forced the government to stop many projects including highways and roads as it cannot afford to continue them without increasing the state revenue.
Industry experts say essential building items such as Aluminium, tiles, water pumps, and rain water gutters have been included under the temporarily banned imports, a move to stop foreign currency outflow.
“Around 70 percent of the state’s project are on hold at the moment,” M D Pole, the past President of the NACSL told reporters.
The industry is struggling to give a definite budget for customers for any building projects with the continuous spike of raw material prices parallel to sharp depreciation of the currency and fuel price hike to record level.
“It has now become a dream to build something now,” Pole said. (Colombo/Aug 27/2022)
