The Hon. S.M. Marikkar

¶ 01 Mr. Chairman, under the Committee Stage of the Appropriation Bill 2025 taken up today, Friday 07.03.2025, I move the traditional motion that all Recurrent and Capital Expenditures under Heads 117, 306, 307, 336, 123, 309 to 311 and 332 relating to the Ministries and institutions listed be cut by Rs. 10 each.

¶ 02 Today we take up two of the most important ministries: Transport, Highways, Ports and Civil Aviation; and Urban Development, Construction and Housing. Speaking particularly on the construction sector under Urban Development and Housing: before 2019, especially before the Easter Sunday attacks, construction contributed about 8-9% to GDP and provided around 1.4 million jobs. Today, due to the economic crisis, higher interest rates, rising raw material prices and dollar depreciation, the sector faces a severe crisis.

¶ 03 By 2018, our construction sector was moving towards exports. Last week, however, we saw foreign players encroaching on our market. We must plan to win foreign markets rather than promote schemes that drain scarce dollars from Sri Lanka. For example, promoting Dubai or Australia property purchases to locals pulls dollars out, hurting our construction industry.

¶ 04 The sector is over-taxed end-to-end. If a company invests in a housing project, roughly 40% of total investment ends up as taxes and charges: 4% stamp duty on land purchase; approvals and fees to UDA and local authorities; taxes on cement, steel, glass, etc.; 18% VAT on sale; another 4% stamp duty to the buyer; 30% corporate tax; and 15% withholding on dividends. Professionals in the sector also pay up to 36% PAYE. Government must enable the industry to earn first, then tax profits reasonably. Otherwise, revenue won’t materialize.

¶ 05 On housing, the state and UDA alone cannot build for all. Advanced economies follow roughly an 80:20 public-private mix; even reaching that by 2030 is challenging. We urge planning for smart cities. Has the UDA prepared smart city plans? If we fail to adopt such concepts, we will fail to deliver quality urban life. Sri Lanka now has among the highest construction costs in Asia—around USD 1,200 per square metre—higher than Vietnam, Myanmar, Bangladesh, India and China, lower only than Singapore. We need to focus here.

¶ 06 Given the government’s inclination for public-private partnerships, call for Expressions of Interest and implement smart city pilots beyond Colombo/Western Province—allocate about 50 acres each in districts like Anuradhapura, Polonnaruwa, Matara, Hambantota, etc.—to decentralize growth.

¶ 07 I commend the Cabinet decision to appoint committees on flood control in Kolonnawa and linked Colombo stormwater. This has been a longstanding problem. We repeatedly appealed to the then President Ranil Wickremesinghe two years ago without resolution. The current government has appointed committees; as MP for the area, I appreciate that. Kolonnawa flood control is intertwined with Colombo’s drainage; please coordinate both.

¶ 08 On relocation of long-term inner-city dwellers under former Defence Secretary Gotabaya Rajapaksa, people from long-settled communities were moved to Dematagoda, Henamulla, Kolonnawa, etc., often forcibly. Many have lived 5–15 years in these apartments but still lack title deeds. Without deeds, children struggle to get school admissions and families cannot access bank loans. During the 2015–2019 period this was neglected too. At one point, there were political shows promising deeds and even to stop instalments; people stopped paying but now face arrears plus penal interest. Please regularize, waive unfair penal interest, and issue deeds. These are small units—often 450 sq ft “chicken coops”—not luxury. Also, UDA-run management committees charge residents, but lifts remain broken and maintenance poor. Either fix maintenance effectively or issue deeds and let resident associations manage.

¶ 09 On Ports: the government promised to expedite the East Container Terminal (ECT). Current information indicates ECT completion could be delayed by about 1.5 years due to cancelling the equipment tender. It takes about eight months to retender and ten more months to procure and install equipment. What is the alternative plan to avoid revenue loss? A Cabinet paper dated 03.12.2024 has been submitted to cancel; what is next?

¶ 10 The Sri Lanka Ports Authority (SLPA) is profitable but suffers excess staffing and inefficiencies flagged by COPE. Overstaffing and mismanagement reduce throughput. In the last year’s first six months, SLPA throughput reportedly fell by about 13%, while private SAGT increased by 21.6%. Major lines—like MCC—are reconsidering operations at JCT. SLPA had also planned an ECT access road with engineers’ concurrence, but it was suddenly halted without feasibility; unions have protested to the Minister in February 2025. Engage professionals and unions before decisions.

¶ 11 The Ministry oversees many critical agencies—SLPA, RDA, SLTB, Railways, Department of Motor Traffic, Civil Aviation Authority, SriLankan Airlines—alongside party organizational duties. Ensure bandwidth for effective oversight.

¶ 12 There are reports about proposals to sell 1:10 at ECT; JVP and unions fought to keep 100% public at ECT. On 31st January, an Additional Secretary wrote to SLPA Chairman calling for Expressions of Interest to partner on ECT, inviting views. Privatizing ECT will reduce SLPA revenue and jeopardize jobs, triggering protests. SLPA must prioritize professional values over political vendettas; listen to unions.

¶ 13 Highways: complete outstanding sections—Colombo–Kandy, Ruwanpura expressway, and connect networks to save time, money and emissions. While many opposed MCC earlier, parts like Homagama–Pelmadulla corridor air-pollution mitigation had value. If grants are unavailable, attract private investment for Ruwanpura Expressway via PPP rather than debt.

¶ 14 On Colombo traffic: earlier plans envisioned elevated links from New Kelani Bridge to Rajagiriya (HSBC) and further an elevated link to Athurugiriya interchange. Reinstate such projects or consider PPP/light rail alternatives. The previous LRT was cancelled; consider PPP/BOT models.

¶ 15 Local issues: Low-Level Road is improved, but land prices surged; thank you for allocating funds to complete remaining bridges. The Ambatale–Grandpass riverside road needs ADB-backed three-lane development; current temporary carpeting conflicts with main water transmission lines; coordinate with NWSDB.

¶ 16 Water and electricity disconnections devastate urban poor living in 85–125 sq ft rooms, sometimes sleeping in shifts. Introduce policy—proposed by NPP—to allow reconnection fees to be amortized into bills, instead of upfront lump sums. Please implement similar for electricity.

¶ 17 I conclude urging humane policies for urban poor who overwhelmingly supported you at the last election. Thank you.