Sri Lanka will ban foreign construction companies undertaking government projects without a partnership with a local entity, unless the project is fully financed
by foreign parties.
“To support the local construction companies, no foreign construction company will be allowed to tender for Government projects, unless the project is fully foreign financed, without forming a joint venture with a local construction or consultancy company,” Finance Minister Mangala Samaraweera announced yesterday.
He said the government wants local companies to benefit from the transfer of technology by forming partnerships with foreign construction firms.
The minister also proposed to revive the local construction contractors who have been hit by high costs mainly due to high taxation.
He proposed to reduce cess on imported construction material by 30 percent and to remove the Nation Building Tax (NBT) on the main construction contractor.
Meanwhile, aiming to attract foreign investors to the luxury condominium market, the government has proposed to grant 3-year visas to foreign nationals who invest a minimum of US$ 400,000 or more in condominiums from this year onwards.
Foreign sales of luxury condominiums remained below 10 percent of overall sales during the past few years.
The government is also planning to impose minimum standards on many of the building materials in order to ensure safety and sustainability of the constructions.
“We do not have minimum standards imposed on many of the building materials used in the construction industry, giving rise to several negative impacts, including the compromise in stability and the sustainability of the buildings and other constructions undertaken,” Samaraweera said.
In addition, the Sustainable Energy Authority is also in the process of introducing minimum energy standards for all commercial buildings in 2019, where 22 existing commercial buildings will be given 5 years from 2019, to transit and be compliant with the minimum standards rule.