Construction industry set to boom:
Local contractors need more projects
Starting his career as a consultant in a semi government organization
he later diverted his energy to initiate a company of his own. Today he
stands among the leading local construction companies.
The initiator of this initiative is none other than Consulting
Engineer and Contractors (Pvt) Ltd Chairman and Managing Director Ashok
Randeni. Following are excerpts the interview with Randeni for this
Q: How did you come up with your enterprise?
A: I was working at the Central Engineering Consultancy Bureau
(CECB) after my graduation for five years. There was a time I felt that
the working environment is not getting well, so I decided to initiate a
company of my own in 1994.
I was able to use the network I have built when I was working and I
started with constructing buildings for the Sri Lanka Army and Air Force
in Anuradhapura. Currently, we have about 15 project sites throughout
the country. Zapco International (Pvt) Ltd, is a subsidiary company of
Consulting Engineer and Contractors (Pvt) Ltd., which deals with
Q: As an entrepreneur what are the challenges you face?
A: At the initial stage getting contracts was a difficult task
but since I had a large network of friends, I managed to get sufficient
jobs for the company. Some contractors especially foreign contractors
bid for very low rates which makes it difficult to bid for projects.
When undertaking a project we have to maintain our staff and pay them
accordingly. Some foreign bidders do not have to pay for their employees
but it is totally different in our case. Our projects are widely spread
across the country and the other challenge I find in this industry is
lack of good managers for projects.
We engage in projects in Colombo as well as in remote areas such as
Jaffna, Pothuvil, Panama, Mannar, Pulmoddai and even the A9 road. We
have been pioneers who undertook construction activities in the Northern
and Eastern areas of the island when the raging war prevailed.
During the war period we constructed a Ramp (green channel) in
Medavachchiya utilizing our own funds and maintained same which
facilitated and eased movement of vehicle transportation connecting the
areas which were not accessible. This was greatly advantageous to the
public as well as the security forces as it minimized the interruption
of civil activities. Even though we have machinery, cash and material in
place without a proper management the task would not be easy.
There is a necessity for trained people for the industry to manage
projects well. Many foreign companies bid for local projects which has a
bad impact on the industry. The labour cost they have to pay is lower
compared to what the local counterparts have to pay. Therefore, we could
not bid for the rate the foreign contractors bid.
Q: What are the strengths of the company?
A: I would say human resources as well as machinery are the
strengths of the company and we have currently employed nearly 1,500 and
we use well maintained machinery.
Q: As an entrepreneur how do you manage your enterprise?
A: I am closely monitoring the work done at the project sites.
I recruit fresh graduates and train them properly based on our concept.
Throughout the year we train more than 100 graduates from universities
and technical colleges. Human resources as well as machinery are the
strength of the company. The machinery cost is high and we have to spend
much on them at times. So we manage our machinery properly. We have a
periodical monitoring system of the performance of each employee.
Q: How did you supply with capital initially?
A: Initial funding came as a fixed deposit of Rs 200,000 given
by my father. Apart from that, my father owned a land in my home town,
Naththandiya valued around Rs 2 million, which I mortgaged and got
finance to establish the enterprise. There should be considerable assets
to obtain bank facilities to establish as a business concern. We need to
give a bank guarantee in this industry. When we undertake a project
normally we are given a 20 percent advance payment but we need to
present a performance and unconditional advanced bond to them.
Q: What made you to start a company of yours?
A: When I was working as a consultant in Anuradhapura, a
terrorist area at that time, I performed my duties to the best. I had
good connection with top personnel in those areas but due to a certain
adverse decisions made by the Management of the organization affecting
my career compelled me to start my own establishment with the strong
idea of becoming a name in the construction field.
Q: What are the strategies you adopt to enhance employee
A: We are in the process of giving attractive incentives to
our employees as well as offering tour packages. We have an idea to
share profit among our leading employees and empowering one or two of
them to the status of becoming Board Directors. With the expansion and
in keeping with my idea of distribution of authority I have invited two
directors from my family to the board of directors.
Q: What is your goal in business?
A: I expect to be among the ten leading construction companies
in the South East Asian region. If people are capable and efficient of
delivering work on time the task would not be difficult.
Q: What was the growth you had for last year?
A: We have achieved a turnover of nearly US $ 2.2 billion for
Q: What are your future plans?
A: I have decided to diversify from the construction industry
to the tourism industry. I have a plan to start a city hotel in Colombo
by the end of this year and set up a travel agency. We have a plan to
acquire a boutique hotel too.
Q: What is the support you get from your family members?
A: My family has always been with me giving all the
encouragement and moral support in my ups and downs and has been my
source of strength.
Q: What is the support you expect from the Government?
A: The Government should concentrate on local preference, and
also need to improvise and introduce methods and plans to expand the
industry and take it to the next level to take it to the regional level
and approach the regional market.
Q: What do you think of the construction industry's future?
A: The industry can rise to great heights with the development
taking place. With the development trends in the present market we can
expect the industry to grow and have a very bright future.