- Skilled labour shortages in construction sector create challenges in rebuilding
- Treasury secures over Rs. 500 b to ‘build back better’
- Govt. fast-tracks projects outside PIP framework to avoid delays
- Planning authorities warn of limited contractors, machinery, skilled staff
- Industry proposes volunteer construction force to address labour shortfall
- Digital infrastructure resilience being reviewed
The Government has launched an extensive ‘build back better’ strategy following Cyclone Ditwah, underpinned by a financial allocation exceeding Rs. 500 billion for 2026.
While the Treasury has secured significant domestic and foreign funding to expedite reconstruction, Government officials and industry representatives indicate that a severe labour shortage and capacity limitations within the construction sector may hinder the pace of implementation.
The Sunday Morning learns that while regulatory and administrative needs for this exist, the physical capacity to execute these projects is constrained.
A reduction in the construction workforce over the past six years, coupled with the migration of skilled labour, has created a significant bottleneck as the country attempts to launch simultaneous recovery projects.
Financial allocations and exemptions
The Government has mobilised substantial funds to support the reconstruction effort, creating a multi-layered financial strategy that separates emergency rebuilding from standard capital expenditure.
Speaking to The Sunday Morning, Senior Additional Secretary to the President for Finance and Economic Affairs G.M.R.D. Aponsu explained the budgetary provisions for recovery.
“In the 2026 Budget, we have already allocated Rs. 1,380 billion for this purpose,” Aponsu stated. “In addition to that, we have allocated Rs. 350 billion for capital expenditure and Rs. 150 billion for recurrent expenditure. The figure of Rs. 350 billion is the rebuilding component for this year.”
Foreign assistance, particularly from India, plays a central and specific role in this financing matrix. Aponsu confirmed that the Indian Government had committed a total package of approximately $ 450 million to the recovery efforts, split between grants and credit lines. “The Indian Government is providing a total of $ 450 million. This includes a $ 350 million loan and a $ 100 million grant,” he said.
He clarified the strategic division of these funds. The grant component is currently being utilised to reconstruct the northern railway line, a project that has already commenced. Conversely, the larger loan component is earmarked for heavy infrastructure, specifically railway bridges and potential road projects such as the Colombo-Kandy and Kandy-Matale routes.
In addition to assistance from India, discussions are underway with other bilateral partners. Aponsu noted that negotiations with China regarding loans and grants were in progress but emphasised that these were not yet finalised.
To ensure these funds can be utilised immediately, the Government has bypassed standard planning procedures for emergency projects. Department of National Planning Director General K.T.I. Premarathna explained to The Sunday Morning that these projects were exempt from the standard Public Investment Programme (PIP) process. The PIP is typically a rolling plan (currently for 2026–2030) that governs all State development projects.
“If we were to include all these projects in the PIP, implementation would be delayed until 2027 due to the required process,” Premarathna said. “However, because the public cannot wait and village access is cut off, we must build urgently. The legal provision exists to execute reconstruction work outside the PIP.”
While the projects themselves have been expedited, the financial governance remains under scrutiny. Aponsu noted that while a dedicated statutory fund was being prepared, an interim mechanism was in use at present to ensure transparency.
“While the concept of rebuilding cannot be regulated, the Rebuilding Sri Lanka Fund itself must be,” Aponsu said. He stated that until the relevant act was passed by Parliament, the Government was utilising eight dedicated accounts under the Deputy Secretary to the Treasury to manage the funds – six accounts for foreign currency and two for local currency. “All of these funds can be used through the Consolidated Fund until a dedicated fund is established,” he added.
Capacity constraints
Despite the robust financial planning, the Department of National Planning has identified significant implementation challenges that money alone cannot resolve. Premarathna highlighted that the State sector was facing a critical shortage of technical officers due to migration, a factor that complicated the oversight of such a massive infrastructure drive.
“A significant number of skilled professionals have migrated over the last two to three years,” he said. “In the Government set-up, we lack technical officers. It is a real challenge to implement such projects with limited skilled personnel.”
This strain extends to the private sector, which is required to balance existing contracts with the new demands of emergency reconstruction. Premarathna noted that contractors had finite resources and could not rapidly scale up to meet the sudden influx of projects.
“We have limited contractors and machinery,” he said. “In addition to their routine contracts, they must now deploy their resources and technical experts for these reconstruction work.” He expressed concern that simply allocating funds would not overcome these physical limitations. “I think that this can be overcome by deploying additional staff or resources,” he admitted. “But it’s a challenge.”
The Government is currently relying on a preliminary damage assessment by the World Bank, but a more detailed, mandatory Post-Disaster Needs Assessment (PDNA) is being conducted in parallel by the Disaster Management Centre (DMC).
Aponsu explained that this dual-track assessment helped verify the scale of the capacity needed. “The DMC is engaging in these exercises because its responsibility is to give the report, which it has the mandatory power to produce,” he said.
Labour shortage and proposed solutions
The construction industry is currently grappling with a severe shortage of manual labour, which poses the single largest threat to the recovery timeline.
Chamber of Construction Industry (CCI) President Eng. Maj. Ranjith Gunathilake explained to The Sunday Morning that the industry was facing the consequences of a six-year stagnation period.
“The short-term impact is severe because for the last six years, the construction industry saw little activity,” Gunathilake said. “When workers are not utilised, they naturally leave the industry.”
He noted that many of these workers had migrated to foreign markets offering higher wages, depleting the local talent pool. “Most of these workers were absorbed by other countries like South Korea, the Middle East, Israel, and Japan at better rates. Only a few remained,” he added.
To address the immediate shortfall, contractors have begun importing labour, a practice that introduces new economic complexities. “We are bringing in labour from India and Bangladesh,” Gunathilake confirmed. “Indian labour is more expensive than Sri Lankan labour, while workers from Bangladesh are less expensive but often less effective.”
He provided a stark comparison of the wage disparity that threatened local pricing structures. An Indian worker costs a contractor approximately Rs. 250,000 per month, whereas the prevailing rate for a local skilled worker is around Rs. 200,000. Gunathilake warned that raising local wages to match the imported rates would be unsustainable.
“If we attempt to match those rates for local workers, our entire salary structure will collapse,” he stated. “Everyone will ask why a labourer receives Rs. 200,000 while they are paid Rs. 50,000.” He noted that unskilled labour costs were already rising, with wages hitting Rs. 180,000 in some instances.
As a structural solution, the CCI has proposed the creation of a volunteer force for the construction sector. Gunathilake described the proposal as a uniform but non-armed corps that would provide dignity and structure to the profession, aiming to attract youth who might otherwise shun manual labour.
“The chamber has suggested establishing a volunteer force where workers receive recognition similar to a non-armed military unit,” he told The Sunday Morning. “This would encourage people to join the construction industry, allowing both the private and Government sectors to utilise this force.”
However, Gunathilake noted that the proposal had yet to gain full traction within the Government. “It appears that Government officials are somewhat allergic to this proposal,” he opined in relation to the reception of the public-private partnership model.
Implementing ‘build back better’
The ‘build back better’ strategy requires that reconstruction efforts include upgrades to resilience and functionality. Premarathna confirmed that this was a mandatory requirement for line ministries and not merely a slogan.
“We have specifically mandated that all reconstruction work must adhere to the ‘build back better’ concept, taking into consideration climate-resilient infrastructure,” he said, adding that ministries were encouraged to integrate new technologies if they aligned with this concept.
Aponsu provided details on how this policy was being applied to the housing sector to prevent future displacement. The Government is moving towards constructing housing schemes with integrated facilities rather than solely providing funds for individual units.
“The Government plans to introduce housing schemes because land is unavailable in certain areas,” he said. “We plan to construct schemes of 300–400 units that include supporting infrastructure, public facilities, and supermarkets, rather than just building isolated houses.”
Aponsu also highlighted that the donation platform allowed for non-financial contributions, such as land, to support these schemes. “If someone wishes to assist the Government in non-financial matters, in relation to land; for instance, some individuals have already donated land,” he noted.
Educational infrastructure is also earmarked for modernisation. “We have instructed officials to incorporate advanced features into schools, such as modern libraries and high-standard washroom facilities, rather than simply repairing damaged buildings,” he said. Similarly, the health sector will see new buildings equipped with modern medical devices rather than simple refurbishments.
Infrastructure resilience
In the telecommunications sector, the Ministry of Digital Economy is implementing a comprehensive ‘three-layer’ strategy to ensure network redundancy.
Deputy Minister of Digital Economy Eranga Weeraratne, speaking to The Sunday Morning, said that the reliance on fibre optics was being reassessed to prevent the communication blackouts seen during the cyclone.
“The current connectivity relies on fibre,” Weeraratne said. “We are evaluating options to establish a redundant path for integrating major hubs, potentially through satellite or alternative fibre networks that do not rely on land routes.” He identified satellite services, such as Starlink, as a potential backup modality currently under evaluation.
The second layer of resilience focuses on power sustainability for base stations. Weeraratne stated that new guidelines would mandate minimum battery backup and generator requirements for towers to ensure they remained operational during power outages.
The third layer involves a dedicated emergency network. “The third is to maintain a 2G or other signalling-based network for emergency services that are limited,” the Deputy Minister said. This network would be restricted to authorised personnel to prevent congestion during crises.
Weeraratne also highlighted the ministry’s rapid response capabilities, noting that the 4,500 communication towers affected by the cyclone had been fully restored to pre-disaster levels within five days.
Beyond physical connectivity, the ministry is deploying digital platforms to manage relief and recovery. “GovPay is being used, and we have launched donate.gov.lk to collect relief donations via credit cards,” the Deputy Minister said. He added that a crowdfunding platform had been created to allow private donors to fund specific projects, such as rebuilding a particular school or community housing scheme.
The digital strategy also extends to agriculture, a sector heavily impacted by the cyclone. Weeraratne pointed to the launch of Cropix, a new digital platform designed to improve data accuracy for farmers. “The platform will collect all farmer data including land and crop details,” he explained. “We need to get the right information on land usage, the crops that are coming up, and crop planning as well.”
The Deputy Minister pointed to future-proofing projects like the proposed Artificial Intelligence (AI) data centre, for which a Request for Information (RFI) has already been released. “This is to see whether Sri Lanka can be a data centre service provider to the world,” he said, noting that this initiative aimed to serve both local Government needs and global demand.
Regarding road infrastructure, the Road Development Authority (RDA) is focusing on slope stabilisation to prevent future landslide damage.
RDA Chairman T. Paskaran told The Sunday Morning that the new projects prioritised mitigatory actions. “Because of the landslide failures, we intend to assess landslide risks and take mitigatory actions while rebuilding roads,” he said.
He distinguished these structural projects from routine maintenance. “Potholes are not a disaster; they are a maintenance issue,” he stated. “A disaster requires a different response.”
The RDA Chairman indicated that while immediate road access would be restored within six months, long-term stabilisation work was expected to take up to one year. The RDA has been allocated Rs. 120 billion for this year out of the national reconstruction budget to execute these designs.
As the Government proceeds with these plans, the primary challenge remains the alignment of financial resources with the available labour and technical capacity required to complete the projects within the 2026 timeline. With billions in funding ready but a workforce stretched to its limit, the success of Sri Lanka’s recovery may ultimately depend on its ability to solve the human resource puzzle.