By The Pulseline News Desk
Sri Lanka’s construction industry has reportedly raised concerns over the accuracy of material price indices published by the state-run Construction Industry Development Authority (CIDA), saying the benchmarks may not reflect rapidly shifting market conditions and are distorting project costs and contract negotiations.
Contractors, consultants and developers note that the indices, widely used in public and private sector tenders to adjust for inflation in building materials, have lagged behind actual price movements for key inputs such as cement, steel, sand and imported finishing materials.
Several industry participants said the mismatch has led to disputes over contract variations, delayed payments and in some cases stalled projects, particularly in government-funded infrastructure works where cost escalation clauses rely on CIDA’s monthly or quarterly updates.
Chamber of Construction Industry of Sri Lanka (CCI) Secretary General/CEO Eng. Nissanka N. Wijeratne has revealed in the media that the CCI had received numerous complaints from contractors regarding disputes arising over claims for price escalations in projects.
CIDA, which publishes the Construction Material Price Index (CMPI) and related reference data used for tender adjustments, has defended its methodology in previous statements, saying it relies on structured market surveys and verified supplier data. The authority has also said its indices are intended as reference tools rather than real-time pricing trackers.
However, Wijeratne has further noted that the problem did not stem from the CIDA formula used for calculating adjustments in contract prices. “There is a problem collecting the pricing data. There is nothing wrong with the CIDA formula,” he has noted.
While admitting that there was a problem in collecting the data, Wijeratne has pointed out that contractors themselves bore some responsibility for the situation due to their failure to properly disclose accurate information.
The debate comes as Sri Lanka continues to push forward with infrastructure rehabilitation and housing projects under tight fiscal conditions, where cost control and predictability remain central concerns for policymakers.
Industry stakeholders have called for a review of the index methodology, including more frequent data updates, greater regional price sampling, and improved transparency on how weightings are calculated.
Officials at CIDA have not indicated whether any immediate revisions are planned.
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