Sri Lanka’s construction sector is expected to undergo significant changes under the leadership of new President Anura Kumara Dissanayake and the leftist National People’s Power (NPP) government following the November 14 elections. Here are five potential policy shifts that may reshape the industry:
- Prioritization of Affordable Housing and Public Infrastructure
The Dissanayake administration is anticipated to focus on social welfare and infrastructure development, including affordable housing, hospitals, and public utilities. This could lead to more government-backed construction projects, though profitability may be impacted by price controls or stringent project requirements. The NPP has pledged to address inefficiencies within procurement, poor project management, political interference, and corruption, all of which have hampered the construction industry in the past. - Potential Nationalization or State Oversight
Under the NPP, there may be an increase in state oversight of large-scale construction projects, especially those involving public land or major state contracts. While nationalization is unlikely, the government may impose greater influence over project approvals and management, which could affect the private sector’s autonomy and market competition. - Regulatory and Environmental Reforms
The NPP’s commitment to environmental protection may lead to stricter construction and zoning regulations. While this would require additional compliance efforts and investment in sustainability, it could open up opportunities for eco-friendly construction technologies and methods. - Shift in Investment Landscape
With the NPP’s focus on reducing external dependence, there may be a shift in the investment landscape for construction. Large foreign-backed projects might face increased scrutiny or delays, potentially leading local contractors to play a more significant role or confront financing challenges if international funding decreases. - Public-Private Partnerships and Local Content Mandates
To support job creation and reduce unemployment, the NPP government may implement policies favoring local labor and materials in construction projects. While this would benefit the domestic economy, it could create challenges for contractors reliant on imported materials or facing skilled labor shortages, requiring the industry to adapt.
This article discusses the potential impact of these policy shifts and how they could transform Sri Lanka’s construction industry moving forward.