Sri Lanka’s steel costs 70-pct higher due to protectionism
ECONOMYNEXT – Sri Lanka’s steel costs are about 70 percent higher than other Asian countries which is hurting housing and apartments for less affluent segments of society more than richer people, an industry official said.
“We believe cost is about 70 percent more at the final consumed price, as opposed to if you imported without all these para-tariffs,” John Keells Holdings Property Group President Suresh Rajendra said.
“The paratariffs are because of all the protectionism,” he said, speaking at a construction sector forum organized by Asia Securities.
Rajendra said around 30-40 percent of a building structure costs are due to protected steel prices, vaying based on the size and the scale of luxury. Cement and labour are other high costs, he said.
High construction costs have ripple effects on multiple sectors, reducing Sri Lanka’s global competitiveness while also lowering overall living standards.
In addition to steel, other construction raw material such as aluminium, tiles and sanitaryware have high protectionist tariffs, benefiting a handful of industrialists.
Rajendra said tariffs on construction materials range from 30-70 percent, which makes housing less affordable. (Colombo/Feb24/2020)