- Industry leaders anticipate increased foreign investment in construction
- Regulatory reforms and infrastructure development crucial for growth
Sri Lanka's construction sector is optimistic about attracting foreign direct investments (FDIs), supported by efficient regulations and an independent judiciary.
Industry leaders highlighted this as global funding agencies, including JICA, the World Bank, and the Asian Development Bank (ADB), resume projects in the country.
Speaking to The Daily Morning Business, Ceylon Institute of Builders (CIOB) President Dr. Rohan Karunaratne said that several FDIs are showing renewed interest in setting up factories and Board of Investment (BOI) projects.
“Currently, the only green light we see is interest in BOI projects and around six initiatives at the Colombo Port City,” Dr. Karunaratne said.
While FDIs show promise, Dr. Karunaratne stressed the importance of supporting local raw material production, especially for small and medium enterprises (SMEs).
He noted that raw material prices, which had been inflated due to monopolies, are now decreasing; providing an opportunity to revive local manufacturers.
The lack of a master plan for the construction industry in 2025 remains a concern. However, the sector is hopeful about government support for local manufacturers and SMEs.
Chamber of Construction Industry (CCI) President Archt. Jayantha Perera also emphasised on the need for streamlined regulations and an independent judiciary to attract FDIs, particularly in the tourism sector.
“An efficient regulatory system and judicial independence are crucial for gaining FDIs. Tourism-related developments, including hotels, can kick-start the industry,” Perera said, pointing out the current shortfall in hotel room capacity.
However, large-scale infrastructure development remains a challenge due to limited financial resources. Perera added that borrowing is not a viable option in the current economic climate.
While challenges persist, the construction sector sees potential for recovery and growth, provided the government addresses regulatory hurdles and supports local industries.