Thursday, October 6, 2016

Jayasiri Samaratunga speaks

Veterans rarely if at all retire. They still have their views. They voice them from time to time. We listen.

Jayasiri Samaratunga, who’s been at it in the country’s construction industry in both the private and public sector, is a veteran. A respected one. In the September issue of BUSINESS MANTRA, he speaks at length on the problems ailing the industry and how, if we are to take stock of and combat them, we should first identify them without name-calling or pontificating.

Jayasiri Samaratunga’s involvement with the industry goes back to his father, the renowned contractor S. D. Stephen. Samaratunga was the Managing Director of the firms S. D. Stephen & Co Ltd and later Idikarana (Pvt) Ltd. That’s his CV in the private sector.

In the public sphere, he was involved with the formation of the National Construction Association of Sri Lanka (NCASL). He was Chairman there and now serves as an Advisor to the Chairman. The Institute of Construction Training and Development (ICTAD) is another organisation he can claim credit for, having served as a Director there until it morphed into the Construction Industry Development Authority (CIDA) in 2014.

He is also a Council Member of the Sri Lanka National Arbitration Centre, the oldest organisation dedicated to resolving commercial and administrative disputes. He represented Sri Lanka at the 26th International Federation of Asian and Western Pacific Contractors' Associations (IFAWPCA) Convention, held in Tokyo in 1993, and was on the scene again when Sri Lanka got the chance to host it in 1999.

How would you summarise the problems the construction industry is facing today?

For one thing, we’re facing a labour shortage. We don’t see enough workers in the industry anymore. There are obvious reasons for this. Firstly, this isn’t a lucrative profession. Most of the time, we see workers from outside the city coming in to the industry to, for instance, educate their children. They can’t work after they turn 50, because of the enormous effort they have to expend on their job. After that, what? Which brings me to the second reason: this industry doesn’t offer security or stability.

You can’t blame people who refuse to work on account of that. To this day, we haven’t implemented EPF and ETF provisions for the likes of them. One common excuse given for this is that, since we still have to go through extensive documentation to get these statutory funds, workers find it extremely difficult to register for them each time they get a job. That’s a valid argument alright, but it begs the question: why haven’t we digitalised employment records to make it easier for such workers to get benefits upon retirement?

Remember, this isn’t a 9-to-5 profession. It’s not even rooted in one place: your work may take you to every corner of the country. And to top all this, we have peak and off-peak seasons for the industry. During the monsoon period, for instance, construction jobs are few and far in-between. So we need to not just attract but retain workers in a way which accrues benefits to them.

Then there are problems which affect the entire industry. For instance, we haven’t had a proper census taken on the industry. We still don’t know how many craftsmen we have. Numbers are important because they help us foresee the problems which may face the industry: if we knew how many builders we have, we could accordingly adjust for the future, without facing these oscillations which ail us even today.

What do you think is a plausible solution for this?

I’ll make a guess and give you a percentage here: only about 2% in this sector get some kind of perk in addition to their pay. They are part of the industry’s permanent cadre. What are we going to do with the remaining 98% who are not? Technically speaking their welfare should be the responsibility of the investor and subsequently the contractor, but the problem is that most labourers are “freelancers” who don’t get into direct contact with any contractor or builder. As a result, their welfare doesn’t figure in his scheme of things.

I suggested in 2014 that the various costs which build up on account of the labourer be stipulated as part of a contract’s Bill of Quantities (BOQ). The Bill of Quantities is basically a document which lists down every cost arising out of that particular contract, be it raw material, labour, or overheads. Every item is quantified to make it easier for contractor and investor to see how much they have to spend. I argued that the BOQ should include EPF and ETF provisions.

I think it was a practical solution because it doesn’t burden the contractor. I suggested that these insurance and pension benefits accruing to the workers be categorised as “Preliminary Items”, which basically include the start-up, sunk, and various other costs related to a job. The contractor needn’t worry because these are accounted for at the outset.

In other words, it’s not his responsibility to meet them: they’re already provided for in the contract and the other party is legally obligated to come up with the amount. Why is this relevant? Well, we still have instances of contractors who deliberately skew figures to make their contracts more lucrative to the investor, which ends up adversely affecting the labourer.

In 2014, the much awaited Construction Industry Development Act was passed. Would you say that it ameliorated most if not at least some of the problems you have identified?

The Act was paved with good intentions. We all wanted it passed. But I’ll tell you that there were problems even in the way it was discussed. If that’s not frustrating enough, there are provisions which were passed but which remain unimplemented even today!

I’ll start with the provisions which aren’t properly heeded to now. One of the problems facing the construction sector, as I told earlier, is that there’s no proper census authority. That’s what Section 55 of the Act tried to combat with the creation of an Authority to maintain a National Database for the construction industry. To date, this hasn’t been looked into.

Forget that for a moment, though. Consider another issue: funding the industry. It makes no sense to sustain a statutorily empowered Authority without financing it. Section 19 of the Act created a Construction Industry Development Fund, which theoretically was and is supposed to look after the interests of the labourers in the construction industry.

Section 19 moreover stipulates that more than 50% of the collected amount should be for the wellbeing of the craftsmen. But 50% of zero is zero, and to this date, no one has considered enacting the Construction Industry Development levy that this Section created to sustain the Fund. Mind you, these are provisions which the government is supposed to be aware of, but I’ve come across officials who’re not. That’s a shame because the levy could have been used to provide pension and insurance benefits to the workers.

I also mentioned certain problems we encountered when passing the Bill. One of the biggest complaints we hear from those in high positions in the industry today is that there’s an influx of foreign consultants who pass off as locals and in effect rob jobs from our people. The fear is justifiable, the paranoia excusable, but those who make these claims forget how much we tried to insert clauses to protect this industry from such threats.

I don’t want to get into the niceties of the obstacles we had to contend against when drafting this Bill, but I will say this: those who howl against the threat posed by foreign consultants forget that we were then at the forefront of the campaign they champion now, when we struggled to insert provisions which would subject such consultants to various criteria before being locally employed. These howlers were curiously silent back then.

Would you offer some thoughts on the industry, as a final note?

I’m glad for what we’ve accomplished here and abroad because at the end of the day we’re not here to just earn big bucks. We’re here to do something for our society. In fact that’s something not many professionals or contractors seem to realise today. They pontificate on problems long after they were identified and they forget how others tried hard to solve them. I know I’m raising a hornet’s nest here, but some of them seem to lack ethics as well. That’s a pity because it’s not only profits that will sustain this industry. If profits were the only thing which sustained it, it would stagnate in no time.

Samaratunga also spoke of the architectural trends that the industry has faced:

We’ve been seeing radical shifts in the kind of architecture our constructors went for since independence. In the first phase, which lasted until the 1960s, constructors affirmed a largely British style, modelled on the country’s climate. From the 1960s that changed to American architecture, introduced and popularised here by an influential builder called Leon Monk. That trend too changed with the advent of two other people, Minnette de Silva (who had studied in England) and Ulrik Plesner (a Danish architect), both of whom tried to develop a style that was home-grown. They in turn gave way to Geoffrey Bawa, who took their vision forward and indeed developed a style more in keeping with our tropical climate. Most architects today are followers of Bawa, not surprising given the depth of his contribution.

Written for: Business Mantra, September