CCI ready to assist UDA in town planning
The speech made by Architect and Planner Surath Wickramasinghe at the
inauguration of the Excon-CCI Exhibition on September 10.
Over the past few years my reviews of the Construction Industry have
been very gloomy. However, this year, I am pleased to mention that
remedies to some of the problems we faced are getting resolved slowly.
A construction site |
My address today will be more oriented towards what the industry can
do for Sri Lanka, if the 'bottlenecks' are cleared.
Before getting into that subject, we must urge the Ministers present
here today to extend their support for the optimum utilization of the
Domestic Construction Industry in locally and foreign loan funded
projects.
In this connection, we have addressed a letter to the Finance and
Planning Secretary to facilitate the inclusion of a substantial part of
the work for the domestic consultants and contractors, when negotiating
for loans and grants. We trust the Ministers will also follow up on this
matter.
We have also drawn the attention of the Finance and Planning Ministry
Secretary regarding the establishment of an Infrastructure Development
Fund in Sri Lanka.
Our Chamber has progressed in identifying IDFC Limited India to
assist us.
IDFC were responsible for setting up of a similar Fund in India which
has helped to transform the Infrastructure in mega cities in India.
This information has been conveyed to the Secretary and we are
awaiting for a response from him.
Surath Wickramasinghe |
At a recent meeting, with the Defence Ministry Secretary we advised
the Secretary that the CCI Membership consists of a vast resource of
talented and visionary Multi-Disciplinary Professional expertise who are
at present available to assist the UDA and other allied agencies to
remedy the prevailing problems in the Colombo City E.g. Flooding,
Squatting and Slum Clearance.
We further mentioned that at no cost to the UDA, if UDA could
outsource the preparation of Integrated Master Plans of the different
towns and cities in Sri Lanka to the CCI, our Membership will be able to
assist the UDA.
This work will be coordinated by CCI and implemented through a
Public-Private Partnership/or a similar arrangement with the UDA
providing the Land, Planning Brief and the Monitoring. When the Master
Plans are accepted by the UDA, the payment to our members could be
obtained from the different Developers/Donors implementing projects in
the different sectors.
For e.g. banks, offices and Commercial Development
This concept could fast track development nationally while generating
employment opportunities not only for the construction industry but also
for the public in different parts of the country.
In response to our request, the Defence Ministry Secretary under whom
the Urban Development Authority is at present offered the Chamber
Membership to design and construct around 3,000 housing units to
relocate persons living in tenements occupying prime land.
He mentioned that the unit cost per apartment of 500 sqft, should not
exceed to Rs 2.5 million.
This challenge was accepted by our Chamber Membership and they have
now prepared six prototypes for multi-storey housing in different
locations.
The financing of the project to be from UDA debentures and from bank
loans. The liberated lands will be sold at market rates. Now that the
internal conflict is over, and a stable Government is in office, the
Stock Exchange is very buoyant, tourism is on a up, and Sri Lanka are on
the threshold of launching a huge development boom with a positive
interest from foreign investors and developers.
I would like to ask the question, are we ready? I would say No. Since
there are inconsistencies between 'rapid economic development goals' and
'the policy frame work to achieve same'.
Therefore, immediate action should be taken by the Government to give
confidence and a commitment to the private sector and create an investor
friendly environment.
I will now highlight some of the deterrents for Development:-
In several areas in the Colombo City, land has been identified as
potential development sites. However, this does not help, since the
developers/investors have to go round in circles trying to find
information but no one Agency is able to answer the questions that
arise.
Consequently, in frustration, the developers.investors either leave
Sri Lanka or are forced to canvas support for assistance from various
political and official sources to get their projects approved for
implementation. This process may take around one or two-years.
This system must change. If rapid development is anticipated by the
Government and I have said it before, it is necessary to appoint an
Inter Ministerial Committee represented by key ministers from the
project approval ministries to approve potential sites for development
of specific Projects by taking the necessary decisions.
Thereafter, Urban Designs for at least two or three or more of these
selected sites should be carried out with the infrastructure services
provided by the Government up to respective sites.
The sites could then be advertised for sale/lease/auction, and
prospective developers investors will then be able to select their
choice of site and commence work on their projects based on the
guidelines given in the urban design. The Singapore model is very
similar.
With the prevailing system, whether it is a BOI or UDA initiated
project, the protocol involved takes time. Fees have to be paid to the
BOI and processing charges for the design/plans to the UDA.
If it is a mega project, the fee proportionately increases. For e.g.
if the processing charges amount to Rs 2.5 million, the applicant would
assume that the payment will cover the cost of all the approvals and the
approvals would be obtained by the UDA.
However, it does not happen that way. The applicant is expected to
obtain approvals independently from all the allied agencies such as Fire
Department, Land Reclamation, CEB, NWS and DB, Airport and Aviation,
Environmental Authority.
In addition, for projects which are not categorized Low Cost
Residential, a Service Charge of 1 percent of the construction cost has
to be paid to the UDA.
This type of multiple levies by the Government is definitely another
deterrent for investors.
The Presidential Security are imposing height restrictions to
proposed buildings depriving the developer of optimizing on the land
utilization, even on land where high rise development is permitted.
They are not convinced that even if windows are not facing strategic
locations like the Parliament, President's House, and similar locations
that construction should be permitted. The Presidential Security must
relax some of their requirements immediately if not, this deterrent for
development will continue.
The recent announcement by the Central Bank that No tax incentives in
the future for Foreign investors is in my opinion very untimely.
We in the construction industry are marketing projects on the basis
that BOI concessions will be provided for Foreign investment.
The main attraction to invest in Sri Lanka are due to the tax
concessions.
If not developers specially from India will not come to Sri Lanka,
since they have enough work in their own country.
The Central Bank must therefore, hold on the withdrawal of these
incentives, for at least two years until the infrastructure in the
country gets better and until the construction Industry completes a few
projects. If not, this will be another huge deterrent for foreign
investment.
I request the ministers present here who are friends of the
construction industry to use your influence with the Government to clear
the Bottlenecks so that the development boom could truly be a success. |