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The 32nd annual Convention of the International Federation of Asian and Western Pacific Contractors' Association (IFAWPCA) took place in Colombo recently. Hosted by Sri Lanka, around 230 foreign delegates together with 150 local delegates from the fifteen member countries in the Asia Pacific region took part in this event. They came from Australia, Bangladesh, Taiwan, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Nepal, New Zealand, Philippines, Singapore, Sri Lanka and Thailand.

Among the foreign delegates were a large number of investors interested in construction projects in Sri Lanka. The event generated a great deal of exposure for both the entire Sri Lanka construction industry and, as a spin off, Sri Lankan tourism.

The Daily News spoke to IFAWPCA's outgoing President Patrick Jayewardene.

Question: In retrospect what impact has the 32nd IFAWPCA had on the Sri Lanka construction industry?

Answer: As a result of this convention, the public, professionals, government sector and politicians are now very much aware of the important role the construction industry plays in Sri Lankan society and in the region, given our links with the various regional associations.

Secondly, the nearly 230 foreign contractors who came here for this convention have given others an idea about the 'climate' in Sri Lanka.

Prior to IFAWPCA when we visited Malaysia they promised to send one or two teams over here, which they did. The Government of Sri Lanka also reciprocated by sending local teams to Malaysia and this included some of our contractors too.

Those discussions resulted in a positive response from Malaysian contractors and developers to invest in Sri Lanka. Among the 230 IFAWPCA delegates who came for the convention were several investors as well. Singapore and Japan are also looking at Sri Lanka very positively in terms of investment. They have also taken back with them very favourable signals of this country as a viable tourist destination.

This convention has enabled us to focus on areas such as investment, tourism, awareness and reciprocation of technology.

The convention also brought in Japan and Korea, which offered Sri Lanka their own construction experience. This experience has impressed our people greatly. Co-operation and collaborations of this nature will certainly help us move forward.

Q: What has your contribution been as the President of IFAWPCA during the past year?

A: Being the President of IFAWPCA, and with a membership of 15 other countries, our team was in a very strong position when talking to other people. We have visited almost all these countries and met officials and contractors in these countries. We've also been to the ADB Head Office and canvassed for favourable terms for this region. However, these discussions will not quite benefit countries such as Japan and Korea, but will definitely help India, Bangladesh, Philippines, Nepal, Thailand etc when the requests materialise.

The first round of discussions were held at the Manila Head Office where we forwarded the problems we have with the funding projects implemented in the host country. But they too had a problem where our request was concerned since the decisions are made by the Directorate which we have not met.

We met only the Director of Implementation but not the Board. What they suggested was since we have a representative on the Board we need to move through the Government and get them to look at our problems favourably. This is what we're trying to do.

One classic example is in this ADB funding there are both international and local bidding. The intention of having 'local competitive bidding' was for local, domestic contractors. But some of the foreign contractors here also tender in that area.

In certain cases they even tendered very successfully and offered the lowest rates. We protested against this. They quote the guidelines and qualify their conditions to bid on the local market by saying that the domestic production or construction facilities are available at reasonable costs, are efficient, and adequate in terms of prompt delivery. It is considered unlikely that foreign suppliers and contractors would not be interested in bidding in the local competitive bidding sector.

In the same clause, Sub Para 05 says that the local competitive bidding shall not preclude participation by foreign bidders. This is the problem we have. This is the struggle that we have in countering this position.

Q: Where are we now in this fight to counter this position?

A: In November, a few of us including myself will go to Washington to meet the ADB. This is alongwith the international confederation of contractors of the world. We are a member of CICA (Confederation of International Contractors Association). We have also prepared the papers. In fact we have informed the IFAWPCA Secretariat about the discrepancies in these documents. Furthermore, they have issued a document recently called the Procurement Guideline Document which too has discrepancies. We're bringing this up too.

At these meetings we're trying to highlight how unfavourable these guidelines are. We will push through the Government too, hoping it will be taken up at board level. This is what we're hoping to do.

Therefore, for the major contractors in this country, IFAWPCA would have brought about this sort of awareness and also our intentions to highlight some of these said discrepancies. Even the ADB and World Bank bodies who are here, are rather autonomous in their decisions. The ADB is fairly responsive. We have already discussed these problems with them. While appreciating the fact, they also say that the decisions have to be made at Board level. I remember the ADB chief saying that we need to look at it afresh and go round the problem to see how best a solution can be worked out.

Q: What do you think the Government can do on the one hand to protect and on the other to encourage the local, domestic construction industry?

A: The local industry is really down right now. Except for one or two contractors who get projects from the private sector and government sector infrastructure work, most of the contractors don't have sufficient work for existence. The reason is that the government is not spending on construction now, on projects and on implementation. We are waiting for funding for projects. We are also gearing ourselves to implement the funded projects. But they are slow in coming. Take the Colombo-Katunayake or the Southern highways, they are not materialising as fast as we expected. If the Southern highway was coming and if construction was in place, we certainly would have got involved. There would have been work for many contractors. The government also says that it doesn't have money to spend on projects.

Q: Isn't there a new avenue in this North and East rebuilding process, which will get a fair amount of foreign funding?

A: Definitely. Everybody is enthusiastic about the North/East rehabilitation programs. I have spoken to some of the people who have direct dealing with them. Right now there are only very small construction projects going on such as school buildings and repairing damaged houses. This is primarily because the major construction would have come through the donors. It is still not happening. It is possible that they are watching the peace process and looking for favourable indications. If the peace process continues with favourable results, then the foreign investors will definitely come forward. But right now, there's nothing much.

We're even trying to formulate a scheme whereby our contractors can get involved in the A9 roadway. We are also impatiently waiting for construction work to come. The results are however not very favourable.

Right now it's bad for the construction industry.

The Treasury cannot even pay the certified payments due to the contractors. If they don't pay I don't know whom the contractors can go to. They have their own commitments - bank loans, machines on lease.

These are the problems being faced by the construction industry. Of course we're very hopeful. If the peace process goes through, things will change drastically. Not only in the North and East, the government is also looking at other areas of development such as the South.

The Malaysians are willing to take up very big projects in other parts of the country - harbours, highways and cooperatives. So if the peace process is successful even to some extent, then there will be lots of money coming in for development purposes.

Q: You spoke of foreign contractors bidding on the domestic scene. In parallel is there a situation where Sri Lankan investors bidding overseas in foreign domestic markets?

A: That's the other side of the coin. Not very many of our contractors are working abroad. Just a handful in countries such as the Maldives and some other countries, taking on contracts and possibly working as sub-contractors for some of the major contractors working in those areas.

We have discussed this with the government too. If our contractors want to go out and tender for work, the capacity is there. But then government support is vital for this by way of bonds and guarantees. The local banks must also help contractors in this regard. But this is not happening, unfortunately.

I know some of our contractors working in the Maldives who find it very difficult to get bonds and guarantees. We sometimes lose the contracts as a result. So the government must look at this seriously and help the construction industry to export its services.

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