Deep discussion on the CIDA Act

1. 1
Important legal Provisions of CIDA act
Introduction
Construction Industry is one of the largest industry in Sri Lanka that contributes more
than135932.22 LKR Million from 2010 until 2017 averagely for the country GDP. Therefore
because of the vast development of the industry a huge necessity arose on standardize in to a proper
manner. It is not enough to have standard forms and instructions to handle. Due to the scarcity of
standard method, in 2014 parliament enacted this Construction Industry Development Authority
act no 33 and planned for a sustainable development.
The Institute of Construction, Training and Development(ICTAD) which is recently renamed as
the Construction Industry Development Authority(CIDA) is established with the Act No.33 of
2014 in order to regulate the activities in Sri Lankan construction industry.
Furthermore the official web site of to the Ministry of Housing and Construction government of
Sri Lanka, http://houseconmin.gov.lk states that main motive of the act no 33 is enacted mainly to
Regulate, formalize and standardize the activities of Sri Lankan construction Industry.
Objectives
The key services that are contributed by the CIDA act No. 33 are;
 To establishment of the national advisory council on construction
 To establishment of the construction industry development fund
 To provide measures for the improvement and wellbeing of the industry related
professionals, manufacturers, suppliers, contractors and craftsmen vision
 Settlement of disputes related to construction activities and to ensure public safety in the
construction industry of Sri Lanka
Through these objectives the main revelation of this act is considered to uplift the Sri Lankan
Construction Industry to authenticated and competitive with international market as well.
When considering about the objectives of the CIDA act no 33;

2. 2
The National Advisory Council(NAC) is established with ex-officio members and appointed
members primarily with the total of twenty-two members. NAC is further combined with the
construction related ministries, importantly IQSSL president and other professional bodies.
NAC Ex- Officio Members
Appointed Members
According to the Part II of CIDA act no33 the members are clarified as follows,
Ex- Officio Members
Chairman
 The Ministry in charge of the subject of Construction - Secretary
(in his absence, an officer not below the rank of an Additional Secretary of
that Ministry, nominated by the Secretary)
 The Ministry in charge of the subject of Urban Development - Secretary
Or an officer not below the rank of a Senior Assistant Secretary in charge
of development work of that Ministry nominated by the Secretary.
 Ministry in charge of the subject of Highways – Secretary
Or an officer not below the rank of a Senior Assistant Secretary in charge
of development work of that Ministry nominated by the Secretary
 The Ministry in charge of the subject of Water Supply and Drainage -
Secretary
Or an officer not below the rank of a Senior Assistant Secretary in charge
of development work, of that Ministry nominated by the Secretary;
 The Ministry in charge of the subject of Irrigation - Secretary
Or an officer not below the rank of a Senior Assistant Secretary in charge
of development work, of that Ministry nominated by the Secretary
 The Ministry in charge of the subject of Housing - Secretary
Or an officer not below the rank of a Senior Assistant Secretary in charge
of development work, of that Ministry nominated by the Secretary
22 members

3. 3
 The Ministry in charge of the subject of Vocational and Technical
Training
- Secretary
Or an officer not below the rank of a Senior Assistant Secretary in charge
of development work, of that Ministry nominated by the Secretary
Table 2.1
The following fifteen members appointed by the Minister
Appointed Members
The Chairman
Construction Industry
Development Authority (CIDA)
Established under section 8 of
act no 33, 2014
The President
(or his representative)
Institution of Engineers Sri
Lanka
Established under the
Institution of Engineers, Sri
Lanka Act, No. 17 of 1968
The President
(or his representative)
Sri Lanka Institute of Architects
Established under the Sri
Lanka Institute of Architects
Law, No. 1 of 1976
The President
(or his representative)
Institute of Quantity Surveyors,
Sri Lanka
Established under the
Institute of Quantity
Surveyors, Sri Lanka
(Incorporation) Act, No. 20
of 2007
The President
(or his representative)
Institute of Town Planners, Sri
Lanka
Established under the
Institute of Town Planners,
Sri Lanka
(Incorporation) Act, No. 23
of 1986

4. 4
The President
(or his representative)
Association of Consulting
Engineers, Sri Lanka
Established
under the Association of
Consulting
Engineers, Sri Lanka
(Incorporation) Act, No.
42 of 2003
The President of the
(or his representative)
Institution of Incorporated
Engineers, Sri Lanka
Established under the
Institution of Incorporated
Engineers,
Sri Lanka (Incorporation)
Act, No. 64 of 1992
Two representatives
representing the Major
and Minor Contractors,
respectively and who are
nominated by the National
Construction
Association of Sri Lanka
National Construction
Association of Sri Lanka
One representative
Nominated by the
Chamber of Construction
Industry, Sri Lanka
Chamber of Construction
Industry, Sri Lanka
One member
Nominated by the
Institution of Engineers,
Sri Lanka
Institution of Engineers, Sri
Lanka
Established by Act, No.
17 of 1968
Four members
Appointed by the Minister
from among persons who
The Ministry in charge of the
subject of Construction

5. 5
have achieved eminence
in the fields of
construction,
environmental science,
labour relations and public
health or occupational
health.
Table 2.2
Tasks of the NAC
When discussing about the Tasks or the responsibilities that are assigned to the members they have
to manage, regulate and solve the constructional industrial issues that come across. With the
establishment of the NAC, the management and Administration of the Development fund,
providing of the development and the contentment of the professionals, manufacturers, suppliers
etc, settlement of disputes and resolutions of the parties, and mainly to ensure the public safety.
As the members of the NAD it is their responsibility to execute the main objectives of the act.
Under part V it is separately mentioned about the Qualified Persons and specific methodologies
to register qualified persons, Credential committees and its functions and several other
requirements are described. As per the above table 2.2 the main qualified professional bodies are
mentioned, and they are the specific institutions that to certify the professionalism.
Moreover, there were specific objectives that were allocated to the members of the National
Advisory Council. The part II sub section 6 mentions the relevant objectives accordingly.
Firstly, the main objective is to amend and to devise a proper mechanism. It is important to
standardize the policy system and to maintain the quality of the construction industry procedures.
At the developing requirement of the industry, the National Advisory Council is the delegate who
represents for the ministry, give suggestions to the ministry regarding the variations required, and
decisive issues are advised and instructed to the authority. Sustainability is another factor that is
currently considering in the construction industry in Sri Lanka.

6. 6
SETTLEMENT OF CONSTRUCTION DISPUTES UNDER CIDA ACT
Introduction for Construction Disputes
The construction industry which is vary from other industries because of the risk on it specially
the cost of the product is very high compare to other Industries. The successful construction
depends on the responsibility carried out by the main stake holders. The main stake holders in the
construction industry are the Contractors and the Employer.
The Employer Obligations - According to the CIDA/SBD/02 Important obligation of the
Employer is the monetary because he has to pay for the work was done by The Contractor, The
Employer has to take responsibilities to reimburse for the loss and expenditures caused to the
contactor. The Contractor has the responsible to carry out the works within the contract period but
the employer also has the obligation to cooperate to the contractor to do his obligation which is
called as the implied obligations. The employer can’t hinder the contractor to perform his duty
according to the terms of contract.
The Contractor Obligations - The CIDA/SBD/02 sub clause 9.1 mention about the obligations
of the contractor, the main obligation of the contractor is to complete the construction with in in
the accepted time according to the contractual documents. The standard of the works and the
standard of the workmanship are the obligations of the contractor and also the contractor should
follow the all the building regulations specially the adopt the specific acts and follow the correct
health and safety procedures.
When Contractor and The Employer violate to perform their obligation according to the agreed
contract the disputes are arising. The obligations have to follow by them clearly mention in the
Standard forms of contract.
Figure 2.1 Construction Disputes
Source - construction data base authority CIDA
12
17
21 19
24
31
39
26
29
24
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Cases per year

7. 7
The disputes cause to stop the works temporary or permanent due to that the both parties have to
face number of issues so the dispute solution is required to solve that issues Generally the
Alternative Dispute Resolution methods adopt during these situations are Negotiation,
Conciliation, Mediation, Adjudication and Arbitration finally sometimes it goes to the litigation.
The construction industry is a vast area so it required an accepted regulated body and act to control
the disputes. According to the law in Sri Lanka, the parliament enacted Arbitration Act No 11 of
1995 which describes the rules when resolving a dispute using arbitration but there must be a
requirement to control and regulate the whole construction industry and the Disputes According
to that a new act enacted by the parliament is the Construction Industry Development Act, No. 33
of 2014.
Main Legal Provisions
According to the Construction Industry Development Act, No. 33 of 2014 Part IX describe about
the settlement of disputes under that there are three sections have included
Section 50 - Settlement of disputes through conciliation or mediation by the Authority.
Section 51 - Right to refer for Adjudication
Section 52 - Register of Adjudicators
When consider the section 50 it mentions that “If the parties so desire any dispute relating to a
contract for construction works, if it is not provided for in the contract, may be settled through
conciliation or mediation by the Authority” it clearly gives the idea that we can go for an
Alternative dispute resolution such as Conciliation or Mediation even though it not mention in the
contract. At the same time when we consider the Arbitration Act. No. 11 of 1995 section Part ii
Section 3. (1) it mentions that “An arbitration agreement may be in the form of an arbitration
clause in a contract or in the form of a separate agreement” According to the Act we can’t go
for the Arbitration without mention that in the contract. It is a clear solution and guidance for the
construction industries to adopt the correct path of the ADR methods.
Dispute Solved Dispute Solved
Figure 2.2 – Process Mapping for ADR methods
Conciliation or
Mediation
Y/N
Dispute Adjudication Arbitration
Y/N
CIDA ACT ARBITRATIONACT

8. 8
The section 50 and 51 itself mentions about the Adjudication specially when a dispute unable to
settle through Conciliation or Mediation the parties can go for Adjudication. The Above legal
provisions describe the procedure of the Adjudication and the procedure of registration, renewal
of the Adjudicators. The Adjudication is the famous and the most adoptable dispute resolution
method rather than the Arbitration. The CIDA/SBD/02 Sub clause 19.3 and 19.4 mention the
procedure and the replacement of adjudicators. Even though most of the parties’ likelihood to find
solution through the Arbitration Act. The main reason was the legality now the Construction
Industry Development Act, No. 33 of 2014 is the parliamentary Act so Construction stakeholders
try to Solve the disputes through the Adjudication.
The Construction Industry Development Act, No. 33 of 2014 under the part X includes about
Appeals board. Specially the sub clauses
Section 53- Establishment of appeals board
Section 54 – Hearing and determination of Appeals
The function of the Appels board, it is functioning like a Litigation (court procedure) because
According to the ADR methods if the parties not satisfy with the Arbitration they can challenge
the decision through Litigation. There are number of inconveniences are faced by the parties when
they go for a litigation specially delay and also the persons who hear the problem not an expert in
Construction industry field but the Appel board which discussed in the CIDA act consist with the
technical person who are appointed by the Minister also they give the solution within two or three
months
Other than this some other provisions also included which is supported to reduce or solve the
disputes the Part XI and Part XII described about the Rules, Regulations, offences also the
construction data base authority. Specially Law should definitely mention about the Offences of
the field in that angle the CIDA act clearly mention what are the offences it is the guidance for the
parties to not to involve in offences

9. 9
Conclusion
The Construction Industry Development Act, No. 33 of 2014 is the first complete act form formed
by the Sri Lankan Parliament. This act includes the Procedures, Rules, Regulation and the required
board and the members which are need to regulate the construction industry of Sri Lanka.
The construction industry faced a big challenge due to the lack of regulation before 2014, even
though the ICTAD act and the Standard Forms (SBD, FIDIC) available it couldn’t control the all
issues of the industry. The CIDA and the act take an important part in the dispute resolution it has
proved the recent data base of the construction data base authority regarding the dispute Resolution
methods
Figure 2.3 Parties responding to ADR after the CIDA act
Source - construction data base authority CIDA
It is confirmed that the after the Construction Industry Development Act, No. 33 of 2014 most of
the dispute has reduced through the Adjudication and Mediation specially through this act other
than the Arbitration and Litigation.
0
20
40
60
80
Mediation Adjudication Arbitration Litigation
% of parties responding
% of parties responding

10. 10
Identification of lacks in relevant legal aspects
However, there are some mistakes also identified in this Act even though this act includes about
adjudication as the main Dispute Resolution when compare to Arbitration act the content and the
guidelines are included in this act specially the procedures the procedures and the registration
details are not in detail so it is difficult to give a solution based on this.
The second error is the most of the provisions are repeating in the act specially in the objectives
and the tasks of NAC also it is giving confusing to the readers.
The another lacks we identified that this act not include or cover the legal provisions for the latest
technology because the construction industry is changing so it is must to discuss about the latest
technology at the same time the points are consider when the contract between other friendly
countries.
Recommendation
The CIDA act is taking important part to regulate the construction industry of Sri Lanka but still
it lacks behind the fund problems so one of my recommendation to overcome the issues is the
government should increase the fund allocation for the construction industry. Also, the People who
formed the Act have to consider the world-wide construction industry and according to that have
to make changes or recommend for changes in the act. Overall our suggestion and recommendation
are to revise this act with the feedback from the technical people and made changes specially
increase details of some provisions and reduce the details not adopt for the current scenario.

11. 11
References
Lanka, P.o. (16 October2014). Construction IndustryDevelopmentAct,No.33 of 2014. Colombo5:
Departmentof GovernmentPrinting.
Lanka, P.o. (1995). Arbitration ActNo 11 of 1995. Colombo:Departmentof GovernmentPrinting.