Sri Lanka’s construction costs skyrocket due to lack of raw materials


Upward pressure on construction prices as a result

Construction activities at the Port of Colombo, Sri Lanka. Vidu Gunaratna/Shutterstock

Construction costs in Sri Lanka are set to climb as the island nation faces a deficit in sand and granite, two of the key raw building materials for the construction industry, reported one of the country’s biggest cement makers.

Officials at The Tokyo Cement Company (Lanka) PLC (TKYO) opined that obtaining licences for river sand mining and sand transport is too restrictive for the supply chain. Meanwhile the Port City project in Colombo is fast depleting the country’s stores of granite rock.

The shortages of key raw materials, such as sand and aggregates, put additional pressure on the overall industry prices,” said TKYO Managing Director S.R. Gnanam.

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“Overall, the construction industry saw the cost of structures spiralling upwards during the year.”

While construction costs in Sri Lanka rank among the highest in South Asia, the construction sector constituted 7.6 percent of economic activity in 2016, compared with 6.9 percent in 2015. Major public works include the Megapolis Project, Port City, Central Expressway, Southern Expressway, and the third phase of the Outer Circular Highway.

The Sri Lankan government recently reestablished the Urban Development Authority mandated to “prepare development plans and to promote, implement and regulate development activities.” Experts believe such a move would dismantle the complex network of overlapping regulations in the construction sector.

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