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LETS BUILD TOGETHER

NATIONAL CONSTRUCTION ASSOCIATION


OF SRI LANKA
Association Profile
The National Construction Association of Sri Lanka ( NCASL) is the apex body in the
country for the development of the Construction Industry. It was originally formed as the
Association of Construction of Sri Lankan in 1981, with the initiation of the Government of
Sri Lanka and the support of the World Bank. With an initial membership of forty
contractors, the Association has steadily grown, and now has over four thousand Regular
Members under its wing scattered through out the Sri Lanka .
While the main Secretariat of NCASL is based in Colombo the Association has a branch
office in each of the nine provinces in the country.
In this capacity, NCASL is principally committed to the industry in

Ensuring that the needs of its members on industrial, contractual and technical
matters are well looked after;

Promoting and encouraging uniformity in the custom and practice of the


construction industry;

Improving the standards of the industry and enhancing the status of its members;

Promoting the development of the industry; and

Participating in social and community services and projects.

Located at NCASL Secretariat Savsiripaya ,123, Wijerama Mawatha, Colombo -07,


the vitality and enterprising spirit of the Association and its members cannot be
underestimated. The permanent building is under construction with six storages; it is
situated in Colombo city limit and will be shifting our NCASL permanently to the
building after constructions. The building will be totally handed over to construction
Association to provide best services to our customers and members. The Association is
well represented in numerous policy- making committees of professional bodies as well
as of those set up by the government. Regular dialogues with the Ministries on pertinent
industry issues are also dynamic and well documented.
The National Construction Association of Sri Lanka ( NCASL) is affiliated to
various regional and international bodies whose objectives are shared by NCASL , that
is, to foster fellowship and co-operation among contractors, to facilitate the exchange
of technology and information and to develop and strengthen the relationship between
governments and member countries. These organizations include the International
Federation of Asian & Western Pacific Contractors Associations ( IFAWPCA)
Work carried out by members of the Association represents more than 95% of the
projects within the industry in Sri Lanka alone. These projects include housing
complexes hi-tech factories, commercial buildings, ports, tunnels, civil works, drainage
and sewerage work, Highways and etc. Members are not only active locally, but also
diligent in undertaking overseas projects, successfully exporting their expertise and
services to other countries.
It is also demonstrated that National Construction Association can play a powerful role
in strengthening the industry capabilities. A Strengthening, sustainable NCASL will
have practical value for domestic builders, construction workers, professional and
supervisory staff, clients, communities, the government and the Sri Lankan nation as a
whole.
The Board of Directors, made up of professionals experienced in the field, is poised to
lead the Association in positioning its members to compete effectively both in the local
market and in the international arena. In planning for the future, NCASL will continue
to keep abreast of technical developments, monitor market changes and maintain the
dialogues with government departments in order to provide its members with the
confidence and the essential support to run the next lap and cross the next hurdle,
NCASL warmly welcomes any new members and is ready to extend to member
contractors its services and all that the Association stands for.
Historical Background
The first Organization of constructors was established in May 21, 1957 under the name
and style Builders Association of Sri Lanka This was the first time in the history
that constructors came together to form a forum of collective representation for the
development of the Domestic Construction Industry.

In Order to board base the activities of the membership of the Builders Association of
Sri Lanka a new Constitution was drafted and under the new name Ceylon Institute
of Builders it was incorporated under the Companies Ordinance of Ceylon No. 51 of
1938.
On December 16, 1981 with an initial membership of 41 constructors the Association
of Construction Contractors of Sri Lanka (ACCSL) was formed. On August 10,
1988 the Cabinet approved the Cabinet paper 116 called Development of Domestic
Construction Contractors Under this Cabinet paper ACCASL Membership has become
mandatory pre- qualification for Government tenders which are less than Rs. 500
million.

In 1989 the Association of Construction Contractors of Sri Lanka was incorporated


under the Companies Act of 17 of 1982. The ACCSL broaden their activities and
opened 09 Branches in all the Provinces. In 1994 ACCSL changed its name to
National Construction Contractors Association of Sri Lanka (NCCASL). On
March 04,2002 NCCASL once again changed its name to National Construction
Association of Sri Lanka (NCASL).
At present NCASL has a membership of over 4000 constructors and clustered into 11
Provincial Branches and it represents every forum where construction related issues are
being taken up for discussions and resolutions.
Vision
To facilitate Members in becoming world class constructors
Mission Statement
To foster and promote the interests and advancement of the Construction Industry and that
of the Construction Contractors of Sri Lanka in fulfilling the Vision.
Objectives

To foster and promote the interests and advancement of the Construction Industry
and that of the construction contractors of Sri Lanka.

To represent and express the views of the construction industry and that of the
construction contractors of Sri Lanka to the Government and to aid, assist and cooperate with others in such representations and expressions.

To take collective action to safe-guard and promote the interest of the construction
industry and that of the construction contractors of Sri Lanka.

The objective of NCASL is to consolidate all related services in construction so as


to develop and promote a structurallysound and united industry. The Association
aims to position its members to achieve greater professionalism and quality in the
construction business. NCASL is committed to the following objectives for which it
was established.

To secure for its members all advantages of unanimity of action:

To secure the recognition of the Association as the official representative of the


building and engineering construction industry by all persons, professional bodies
and authorities whose interest extends to and embraces the building and engineering
construction and allied trades;

To promote and encourage uniformity in the customs and practice in the conduct of
the building and engineering construction industry to promote just and honorable
practice in the conduct of business and to suppress malpractice;

To promote means and measures to maintain and improve the standards of the
building and engineering construction industry and to enhance the status of
members thereof with the general public and to ensure the general public fair and
equitable treatment in dealing with the building and engineering construction
industry and vice versa;

To promote the development of the building and engineering construction industry


of Sri Lanka, its industrial resources and that of allied manufacturing industries by
active participation in the said industry.

NATIONAL CONSTRUCTION ASSOCIATION OF SRI LANKA

ETHICS STATEMENT / CODE OF PRACTICE


1. NCASL members shall govern themselves in accordance with business practices
that are founded on trust:

Be a leader of character- become your word


Honour all contractual obligations
Conduct all business with integrity
Promote the use of ICTAD Standard Contract Documents
Commit to working together to resolve issues and disputes in a manner that
is fair to all parties involved
Treat industry colleagues with respect and fairness
Establish a relationship of cooperation between all parties

2. NCASL members will ensure that jobsite/workplace safety is first and foremost.

Develop and implement an occupational health and safety plan (company or


site specific) and communicate it to each employee and every visitor to the
site.
Provide appropriate training and supervision for employees
Ensure that health & safety policies and regulations are in place on all
projects and that such policies are well communicated to all personnel

3. Every transaction to which any member is a party shall be conducted in the interest
of profiting all parties concerned.

Understand that our goal is that all members are Partners in profit a good
contract is one where all parties are given the opportunity to prosper under
the contract.
Ensure that you have the necessary level of competency to complete the
work as defined by the contract.
Uphold the principle of appropriate compensation for services provided
All parties to a contract shall ensure that an appropriate level of planning
and coordination is carried out on a project
Just say NO to bad deals.

4. NCASL members, as industry leaders, will avoid actions that are incompatible with
the best interest of the construction industry as a whole:

Refrain from bid rigging, bid shopping and bid peddling


Respect ownership of property
Be proactive in the elimination of unethical practices
Conduct all business in accordance with the highest industry standard and in
a manner which will not bring disrepute to the construction industry.
Provide the best in quality of work in conformity with applicable building
codes, regulations, and laws
Refrain from activities that involve a conflict of interest
Avoid verbal agreements- put it in writing every time.

5. NCASL members will abide by and use the recommended practices for standard
contracting and bidding procedures .
Uphold the confidentiality of the tendering process at all levels
Promote the practice of awarding bids in compliance with criteria set out in
tendering documents
Sign contract documents expeditiously
Seek tenders only from competent bidders and do not solicit tenders or
quotations you do not intend to use
6. NCASL members shall act as good corporate citizens:
In all projects and related business, members shall consider the best
interests of the community
Support equal opportunity hiring and pay practices
Support and promote NCASL awareness programs
Adhere to all municipal, provincial and central legislation that s applicable
to the members business operations
Deal justly with employees, customers, suppliers, consultants, and
contractors
Actively participate in and promote industry and community associations

7. NCASL members will undertake appropriate programs to protect the environment:

Know and comply with all environmental rules and regulations


Reduce, reuse and recycle
Promote cooperation with owners, consultants, governments and others
to minimize negative environmental impact
Where available, use products or processes that are environmentally
friendly

8. Moreover, NCASL members commit to advancing their industry and their Association
Promote and support your Association and its members
Refer business to your fellow members
Encourage volunteerism in order to achieve the benefits from NCASLs
networking opportunities
Understand that NCASL membership is based on the principles of
honour, respect and character
Breaches of the Code of Ethics shall be dealt with in accordance with the
provisions of the Associations by - laws

(01)
EXECUTIVE SUMMARY
The Chairman & Board of Directors of Southern Branch of the National Construction
Association of Sri Lanka have recognized the need for a Corporate Strategic Plan in order
for the Branch to progress in a structured manner to the optimum benefit of its members
and whole construction industry.
The Plan focuses mainly on 3 key areas, namely.
1. Services & Support to members.

Advisory services
 Training (Work shops, Seminars) for contractors and government
officials (engineers ,Technical officers, Accountants etc.
 Research / Development
 Constructors upgrading, Joint Ventures, Consortiums
 Dispute resolution
 Acceleration of payment

2. Information / Communication
 Government policies & regulations
 Public Tenders and Tender results
 Newsletter with information





Marketing and promotion


Fund raising
Data collection, index, Job market, Equipment rental for contractors
Date base on construction Contactors and monitor/ review the
Progress, performance of contracts undertaken by members

3.Organizational Structure
Role of Board of Directors
 Regional representation
 Committees, task forces
 Administration / Staffing

(02)
In order to achieve the desired results it is proposed to establish a position for a Member
Support Services Coordinator, to be stationed in Matara and to have a field Consultant
stationed in each of the 3 districts. It is also proposed to establish a position for an
Information / Communication Coordinator to be stationed in Matara.
In order to increase the efficiency and effectiveness of the organization and improve the
way in which the Board of directors operates it is proposed to establish a number of
committees which will function on a continuous basis in special areas. In addition to the
committees it is proposed to establish task forces which will be dealing with matters of a
more temporary nature.
A budget estimate has been included in the Plan as a guide to establish viable financial
planning.
It is anticipated that this Plan will act as a guide to the board of directors for the next 3-5
years. However, changes and adjustments are expected to me made along the way.

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1. INTRODUCTION
The Canadian Executive services organization (CESO) was contacted by the National
Construction Association of Sri Lanka, Southern Branch (NCASL - SB) in September of
2005. The Branch requested assistance in preparing a plan for its activities, especially with
regards to services to its members. CESO agreed to provide an adviser with experience in
the construction industry and who would be working with NCASL - SB staff and board of
directors in drafting a corporate strategic plan.
The terms of reference in agreement with CESO- specially requests the adviser to:

Share knowledge on construction practices.

Advise association on developing a proper mechanism to become a more active


advisory body and to address member needs:
I. To provide assistance in the preparation of project proposals to be forwarded
to State bodies / Banks & Lending Institutions.
II. Establish guidelines for providing services to assist members in all areas of
the Southern province.

Identify needs of member companies and outline a plan to address those needs, such
as skills upgrade, project management and financial management.
Assist in developing a corporate strategic plan for the NCASL SB, including
organizational structure and the provision of services as outlined above

CESO is a Canadian nongovernmental organization (NGO) which provides advisory


services to private individuals, corporations, associations and governments at all levels in
developing countries around the world and among indigenous people in Canada. CESO has
on its roster a total of over 2000 volunteers who are sharing their knowledge and
experience with clients throughout the world.
CESO signed an agreement with NCASL SB to provide a volunteer adviser to work with
the association over a 4 week period in February and March of 2006. This Corporate
strategic plan has been prepared as joint work between the CESO volunteer adviser, the
Southern branch office staff and engineering consultant District committee Directors and
the Branch Board of Directors.

( 04)

2. OUTLINE OF NCASL SB
2.1.

Brief History & Overview of NCASL

The National Construction Association of Sri Lanka was formed in 1981 and incorporated
in 1989. The Association was established with the help of funding provided by the World
Bank.
Over the years the Association has evolved into a large organization with a National
membership of over 3500 construction firms. There is a sizeable number of
construction companies mostly small firms- that are not members of the association. But
membership of NCASL is mandatory for firms that wish to participate in bidding on
government contracts.
Construction Training and Development (ICTAD) which is an institute established by the
Government of Sri Lanka for the purpose of grading contractors in categories, according to
skills, financial and technical capability.
The NCASL is currently operating with a budget of about Rs. 17.5 million with the main
share of income coming from membership dues (about 95%) and advertisement
revenue/sponsorship and special fund raising making up the remainder.
Each of the provinces in Sri Lanka has its own branch of NCASL. The membership dues
are collected by the branch offices and then handed over to the national head office in
Colombo. Currently the Southern branch for example, is allocated an amount of
approximately Rs. 6 50,000/= per year which less than half of what is collected in dues
from the branches approximately 200 members. The branches are allocated a certain
amount of money for maintenance of office staff salary and saver limited funds for other
activities.
2. 2

Current Corporate Structure

The NCASL at the national level is governed by a Chairman and a Board of Directors with
9 members (including the chairman, secretary, treasurer and 2 assistant chairmen) All
provincial branches are represented on the Board of Directors. There is an administrate
staff headed by a general manager.
The mandate of the national Board of Directors is as the name implies- to deal with issues
at the national level, i.e. government policies and other matters affecting the membership
though the branch office- in the form of services relevant to its members. Such as seminars,
consultancy etc.
The Southern Branch of the NCASL in governed by a board of directors consisting of 15
members, including the chairman, secretary and treasurer. The Board is up for election
every year- at the annual general meeting. The chairman may be elected for a maximum of
3 times, i.e. for 3 years in total, while the other board members may be elected any number
of times.

( 05)

There are 3 districts within the Southern Province. It was recently decided (2005) that each
of these 3 district form a committee c/w chairman, secretary, treasurer and members at
large to a total of 8-9 members on each committee. The committees meet once every month
to discuss matters of interest and importance. This new
concept
with
district
committees may be expected to undergo minor changes and adjustments when sufficient
feed-back has been received on it.
The 3 districts within the Southern branch are to a large extent equally represented on the
Board of Directors with 4, 5 and 6 members respectively. (The number may vary slightly
according to the circumstances)
The Southern Branch of NCASL has its head office in Matara. The office is staffed with an
administrative officer, assistant secretary and office aid, during very busy periods
additional part-time staff may be hired. In addition to the above administrative staff a
consulting engineer is hired on a contract fulltime basis. The duties of this consultant are to
assist the members on matters of contract interpretation, construction technology and
techniques, registration, grade category, bid preparation (estimating) correspondence
regarding payment etc.
The duties of the administrative officer are to handle all correspondence with government
bodies, NCASL head office and Southern Branch members, to record
minutes
of
monthly Board meetings, keep records of expenditures and ensure budget requirements are
met, general, day-to office management. The office secretarys duties are to type letters,
issue invoices to members for dues and general clerical
work. The office aids job is to
keep the office tidy, make tea and run errands.
The office currently has one computer which is used mainly for word processing and some
spread sheet work. The computer is used solely by the assistant secretary
(and by the hired part time secretary during peak work loads.)

( 06)
3.

BRIEF OVERVIEW OF THE CONSTRUCTION SECTOR IN THE


SOUTHERN PROVINCE

3.1

Description of the Construction Companies

The NCASL Southern branch has approximately 250 members. This number varies
somewhat from year to year. Sometimes Contractors do not renew their membership
because they at the time perform work on, for example, private building projects where
membership in NCASL & registration and registration with ICTAD may not be required.
They may then rejoin the association when the need for Registration. and membership
arises.
The total number of construction companies in the Southern province has not been
determined for the purpose of this Strategic Plan, However most of the Companies outside
of the NCASL membership are very small scale.
The member Companies under the Southern Branch are registered by their grading. They
are graded from M 9, which is the lowest, up to M1, which is the highest. The grading
determines, within a certain range, the total value of contractors that a company can take to
hand at any time within calendar year. It is tabulated as follows
( in Rs. Millions) :M1

Over - 300

M2

150 - 300

M3

50 - 150

M4

20 - 50

M5

10 - 20

M6

5 - 10

M7

2 -

M8

1 -

M9

0 -

( 07)

The grading is divided into different Sub Sectors as follows:Building


Highways
Bridges
Water Supply & Drainage
Irrigation & Land Drainage
Dredging & Reclamation
Other
In addition to the above there are specialist sub sectors and grading in electrical mechanical
and piling work.
A company may operate in several different sub sectors, i.e. road building, drainage and
irrigation, building etc. but must be graded in each, of these sub sectors, according to
capability and past performance.
The highest individual grade, that a Contractor has determines the contract price range
within which he can perform work in any given year.
The members of the Southern Branch are generally small contractors and for the most
operate as sole properties. Only a few companies are incorporated.

( 08)

The members, listed by grading & district basis are as follows as at 2006/03/31

Grade

Matara

Hambamtota

Galle

Total

M1

M2

M3

M4

11

M5

21

M6

13

29

M7

39

12

36

87

M8

20

M9

13

69

33

81

183

(09)

CLASSIFICATION OF (ICTAD) GRADINGS


AS PER FIELD OF SPECIALITIES OF
NCASL SOUTHERN BRANCH MEMBERSHIP
AS AT 2006/2007

FIELD OF SPECIALITY

ICTAD GRADE
M3

M4

M5

M6

M7

M8

M9

ALL
GRADE
TOTAL

BUILDING

02

13

22

25

143

25

12

242

HIGH WAY

01

01

06

21

173

24

11

237

BRIDGE

02

12

04

18

03

02

13

184

24

11

237

02

14

186

24

11

237

RECLAMATION

15

185

24

11

235

OTHER

WATER SUPPLY &


DRAINAGE

IRRIGATION & LAND


DRAINAGE

DREDGING &

No. of members not registered with ICTAD .= 23


(non graded)

(10)

It is seen from the above that only 2 companies currently are registered to perform
contracts totaling over Rs. 50 million while the vast majority of companies are registered
to perform work totaling under Rs. 10 million indeed the largest single group of
contractors are in the M 7 range at Rs. 2-5 million.
Very few of the contractors under the Southern Branch use computers in accounting or
project management. It is estimated that only a dozen or so would make use of computer
beyond word processing tasks.
A typical contractors in for example, the M 7 grade would employ 12-15 people, be in
possession of only very basic equipment, such as concrete mixer and a few power tools.
The staff would have only limited formal technical training He, may employ a number of
carpenters and masons but may not have a technician.
Road construction equipments for example in the M5 grade would consist of a tandem axle
truck, vibratory roller, vibratory tamper plates, tractors with trailer and possibly a front
loader or loader/ backhoe. Technical staff would consist of a junior or intermediate
engineer.
None of the local contractors within the Southern Branch would be able to take on any
major new road construction project, which would involve several kilometers of earthwork,
sub grade work, hot mix paving and affiliated drainage works. Large scale road
construction is vary equipment intensive and requires large amounts of capital and
resources. The Road Development Authority (RDA), operated by the Central Government,
has been established to manage large road projects. Reportedly, the RDA also has some
equipment and would thus fill a need existing due to lack of available road building
machinery.
Building construction is, on the other hand, labour intensive but requires relatively limited
large equipment and machinery, especially with the simple cast-in place post and beam
structure and where the infill walls are made of bricks. However, large scale building
projects do require good management skill and experience, in order for the contractors to
coordinate the various components of the work in an efficient manner.
The Joint Venture concept is not used much, despite its obvious advantages. It is a concept
that requires cooperation between partners. The new proposed government procurement
regulations by NPA and Construction policy by ICTAD would encourage the forming of
joint ventures.
On large projects, funded by international funding agencies such as Asian Development
Bank or individual donor countries, the work has mostly been awarded to international
firms. Presumably due to lack of local capability. Although local contractors have been
involved as subcontractors with these foreign firms, there has been limited technology and
management transfer as a result

(11)

3.2

Description of Construction Activities.

There has been a fairly significant growth in the construction industry over the past few
years. The government has invested in large scale road development and irrigation projects.
The private sector has also contributed significantly. Prior to the Tsunami disaster in
December of 2004 the tourism industry impacted positively with new small and medium
size hotels in order to accommodate the growing number of tourist coming to Sri Lanka.
The Tsunami disaster caused the tourism industry to collapse in coastal areas and it will
take a few years to recovers to the pre-Tsunami level. However, the destruction caused by
the Tsunami to residential housing, hotels, public building, bridges, and other structures has
created a huge demand for materials and skilled trades people. Large amounts of funding
from foreign sources were injected into the local building sectors (residential, commercial,
and industrial) amounted in economic terms to approximately 25% and the public sector
(schools, hospitals, etc) to about 75% or more of activities in the building industry.
Following the Tsunami this split has been reserved, with 75% or more of activities in the
private sector & 25% or less in the public sector.
The rebuilding following the Tsunami is expected to last another 3-4 yeas but is probably
nearing peak activity at the moment. There has been a huge increase in fuel and material
cost over the past year, for example 50-60% for diesel fuel and 40% for cement. Although
government contractors do allow for increased payment to compensate for rising costs,
delays in these payments has caused undue hardship for many contractors.
No detailed and comprehensive data on actual construction figures in economic terms in
the various sectors has been retrieved and produced for the purpose of this Strategic Plan.
Exact data for example in the private sector of residential housing is difficult to obtain.
Following the Tsunami vast amounts of money was donated by various N.G.O s for
reconstructions. Donations from individuals (on a one to- one basis) were/ are also
considered significant although almost impossible to verify.
NOTE: THERE IS AN INFORMATION GAP HERE. WE HAVE RETEIEVE SOME
FIGURES FROM THE PROVINCIAL GOVERNMENT ON ESTIMATED BUDGET
SPENDING. THE CENTRAL GOVERNMENT HAS NOT GIVEN US ANY DATA
YET. IT WOULD BE IMPORTANT TO BE ABLE TO ESTABLISH FOR EXAMPLE
CERTAIN TRENDS FOR CONTRUCTION ACITIVITIES IN THE PUBLIC SECTOR
AND FOR LEARING ABOUT LONG TERM PLANS.

(12)
4.

NEEDS ASSESSMENT OF CONTRACTORS WITHIN NCALS SB

The very short time frame for the preparation of this Corporate Strategic Plan did not allow
for a detailed and comprehensive survey of all the problems facing the member contractors
of NCASL- SB.
As an alternative approach, given the short period of time available, records of services
provided by the Associations Consulting Engineer in Matara have been used. As a
supplement to the service recorded, several contractors and government department
officials were interviewed for comments on the most common problems and difficulties
facing the contractors. The NCASL - SB Board of Directors and District Committee
officials also contributed with comments.
4.1

Problems and Needs

The problem and needs of the smaller construction firms are not really that different
From that of the medium to larger firms expect in the area of assistance with very
basic paperwork
Most common were:

Filling in of Grade Application Forms


Filling in of Tender Forms
Correspondence with clients & others during the Contract Period
Claims preparation
Delayed payment by clients
Interpretation of details in contract such, as conditions, specification of
work./ material etc.
Project management (record keeping, cost control) late completion
Lack of technical know-how.
Improvement of quality & workmanship
Improvement of productivity
Elimination of wastage and keep-up sites clean and tidy
Difficulties in obtaining bonds & guarantees

The record of services by the Association consulting Engineer shows that services on
average provided to 18-20 members each month. It is estimated that over 80% of these
services have to do with assistance in basic paper work, such as filling in forms and
drafting letters for official correspondence.
It is noted that the Consulting Engineer Operates out of the Matara office of the Southern
Branch and it is safe to assume (as has also been reported) that a large number especially
small contractors, in the more remote regions of the province, are discouraged in seeking
assistance because of distance and cost/time in traveling to Matara.
In addition to the above problem, as evidenced in the service report, the members are
facing problems with cash flow, access to bank loans (high interest rates) & access to
equipment lease, difficulties in obtaining bid, performance, Advance Payment Guarantees.

(13)
4.2

Other Needs

During the course of the conversations with NCASL - SB staff, Directors, Clients and
members it become clear that there are many needs and shortcomings that are not always
obvious to the individual members, but never the- less are huge obstacles to the
development of an efficient and thriving industry. The Board of Directors of the Southern
Branch recognizes these needs and the key Ares can be summarized as Follows :

Associations liaison with client (Government at all levels), influence on


government policies.

Information sharing and distribution though the Association (the


Associations role as a broker)

Access to support services for members in outlying areas.

Marketing (promotion and market research) of the construction industry


to private sector clients.

Capability of individual companies to expand and development


alternative methods towards achieving growth, such as joint ventures,
equipment cooperative etc. are virtually untried)

Use of new technology or techniques. For example, the use of computer


technology, even for simpler tasks, is currently used very little.

Skill up grading and Development of Skilled / Semi skilled workers.

Skill upgrading and management development of supervisory and


professional staff

Enhancement of capacities (Technical /Management) in the public


sector (provincial council )institutions , local government etc. (use of
innovative techniques, modern technology and utilization of
information and communication technology ,computer technology etc.)

Productivity improvement and systems and processes improvements in


the Construction process of the public sector.

Formation of regional committees where necessary under the direct


level

membership to be extended to other trades, such as Hardware, Timber,


Metal & crushing, building material manufactures, furniture, ect.

(14)

The Southern Branch is within its current very limited budget only able
to provide very basic training and education for its members , mostly
through Seminars sponsored by private companies ( Supplies etc.)
government Agencies and NGO s .There is a great need for expansion
of the continual education and training in all areas within the .
contraction sector

The area of work place safety has not been a high priority but it should
nevertheless become a part of the overall improvement of the industry.

Establishment of Database on all skill labours such as masons,


carpenters electricians, painters, bar benders, plumbers, welders sub
contractors, at district / Local level.

Setting up of mediation panel at district level to dispute resolution.

Non Payment of price escalation for ADB funded projects for less than
one year duration contractors.

Difficulties in obtaining bonds & guarantees

High interest rates

Setting-up of construction industry guarantee fund (CIGF) fund regional


office)

(15)

5.

THE COMPONENTS OF THE STRATEGIC PLAN:

This section outlines a strategic plan for the NCASL SB. It is intended as a guideline for
the leadership of the Association.
The NCASL SB has recognized a demand for a Strategic Plan that is structured to meet
the need of the construction industry in order for it to expand, develop and improve in both
economic terms and in terms of quality and performance.
The construction sector is a very important part of any economy, be it at the national or the
regional level. The economic performance and activity of any country tends to fluctuate
over time depending on internal and external factors, some of which may be outside of
control of government or industry. The construction industry tends to be one of the first
victims during a downturn in the economy but will also feel an upsurge very quickly. It is
important to equip the industry with the right means in order to respond to these changes in
an effective manner and the strategic plan is to be seen as a step in that direction.
The current mandate of the NCASL SB will not be altered in principle through the
implementation of the strategic plan. The plan is to be considered a natural expansion of
activities already undertaken by the Association. Likewise, the relationship with the mother
organization, NCASL, will remain unchanged. It is anticipated that the collaboration with
the NCASL office and Board of Directors will increase as some of the policy and principles
in the strategic plan require action at the nation level.
5.1

New service and Activities

The Southern Branch will be taking the lead role in implementing the proposed plan and in
order to achieve the goals it will be concentrating on three key areas:
1.

Member support service

Direct assistance to members


(individual on site, technical, management, legal.)

Indirect assistance (group training, seminars, awareness programs


workshops etc.)

Assessing deficiencies in the client/employees and develop systems


and procedures
2.
Information / Communication services.

News bulletins, monthly newsletters

Database on member activities, contractor index web site.

Economic forecasts, trends, government and private contract


tendering and results.

Image building of contractors and the industry.


The above two key areas will, of course to a large extent be interrelated.
3.

Organizational Structure

Regional representation, committees, task forces, administration /staff

(16)
5.1.1. Member Support services
The needs of the membership may change over time. In order to respond to the needs in the
most effective manner it is recommended that a questionnaire be forwarded and completed
by the members in connection with the annul updating of the registration.
It is proposed that direct assistance be provided to the individual members by field
consultants (technicians or engineers) who possess the necessary skills required for the
task. It is anticipated that most of the assistance will be with regards to relatively simple
tasks such as filling in of forms, correspondence and basic technical advice. However, it
should be emphasized that such assistance must have an educational content, i.e. the
individual beneficiary should over time be enabled to perform the task himself.
It is recommended that a field consultant be stationed in each of the 3 district within the
Southern Province. The consultant in the Matara district would be stationed in the
Associations Matara office while the other two would be stationed in Galle and
Hambantota. It is noted that the consultant should be prepared to go to the site of the
contractor for advice / assistance as this is expected to have the most beneficial effect.
The field consultants should as a minimum have technical skills equivalent to B.Sc as
defined in Guidelines for Grading of Construction Contractors (by ICTAD) and have
minimum of 8-10 years experience, covering road construction, water works & drainage as
well as building construction. The consultant must have good communication skills and
should have a broad knowledge of contract documents, requirement of the contract,
ability to draft correspondence, good knowledge of project management (record keeping,
cost control etc.) and be able to advise on technical matters at intermediate level. (Advice
on more control etc.) and be able to advise on technical matters at intermediate level.
(Advice more complicated technical matters may be sought through the Matara office.) The
Consultant should also be prepared to from time to time to conduct workshops or training
seminars for smaller group of contractors.
It is proposed that a member support services coordinator be hired on a full time basis, to
be stationed in the Southern Branch office in Matara.
The coordinator should as a minimum be a B Sc or equalent engineer with over 15 years
experience, including managerial and supervisory in the construction industry, have
excellent communication skills, have working knowledge of computer programs such as a
word processing, spread sheets (EXCEL) and CAM, MS Project

(17)

The duties of the member support services coordinator should include (but not be limited
to):
Coordinate activities within all support services.
Supervise field consultants
.
Train and advice field consultants as the office evolves, c/w computer technology
over time.
Assist members on topic beyond the capability of the field consultants.
Arrange workshops and seminars in collaboration with suitable sponsors or solely
by the NCASL SB. May be required to teach at Seminars
Establish network and coordinate specialist consultants (such as legal advisors,
accountants and technical specialists) that may from time to time be drawn
upon to advise on special issues on a fee basis
.
Develop training material for use at workshops.
Act as adjudicator in disputes
Collaborate with the Information/Communication coordinator and maintain
contact with NCASL Secretariat
.
Attend monthly Board meetings, report to B
Continuously survey the need for services, monitor feed back from recipients (for
example in collaboration with specialist advisors develop standard agreement
forms that may be used by the partners) in joint ventures equipment rental
cooperatives, job listing for skilled laborers etc.
In order to make support services sustainable, it is proposed that the cost of maintaining the
services be covered in part by collecting user fees after an initial period of 3 years. It is
proposed that external funding be sought for the establishment of the support services over
an initial 3 year period.
Alternative funding (other than user fees) for maintaining services may also be considered.
For example, a small percentage fee on all government constructs may be collected and set
aside for service provision. However, this would require consent at the National level.
A budget estimate for establishing and maintaining Support Services is included in the
section Budget estimate and Financial Plan.

(18)

ACTION PLAN:

Seek funding (grant money) through sources such as GTZ, UNDP, World Bank and
other for establishing Member Support Services.

Hire a suitable candidate as Coordinator of Services

Establish office of Coordinator, c/w all necessary equipment

Develop program for services, seek input from members

Hire Field Consultants and establish Offices

Implement programs

Update programs, monitor and evaluate success/failure, adjust

Develop new service programs as need arises

5.1.2. Information / Communication Services.


Information and communication is key to running a successful organization. In order
for the Board to make rational decisions on behalf of the membership it is important to
have up-to-date information on all matters pertaining to the industry and it is equally
important to have proper communication between the association and its members as well
as between the association and government departments at all levels and the private sector.
Information of importance to the members of the association would be upcoming
government contracts and budgets, potential development in the private sector (housing,
commercial etc.) as well as tender results. New government regulations Communicated and
any other developments impacting the construction industry must be communicated
efficiently to the membership. This could be accomplished by issuing news bulletins or
through the proposed monthly news letter.
The association should also establish and maintain a data base of the activities of its
members such as I provided in the report that is required for renewal of registration of each
member. This report could be extended to include additional information of importance
with regards to construction activities. As a service to members, the association could also
establish and maintain a contractor index, c/w listing of equipment for hire or special
construction services offered by members.
It is proposed that an information/communication coordinator to be stationed at the Branch
Office in Matara be hired by the association on a full time basis. The candidate should
have broad knowledge of the construction industry, have excellent communication skills,
be familiar with government departments at all levels, be proficient in the use of computer
for word processing, data base and be capable of designing and maintaining a website.

(19)

Duties of the information/communication coordinator should include (but not be


limited to:

Prepare monthly news letter to members

Attend monthly Board Meetings report to the Board

Establish and maintain information data base, website.

Retrieve and communicate information from different sources such as govt. depts..,
private sector etc.

Act as spokesman for the association in capacity of Press Secretary

Promote the association, marketing on behalf of membership

Perform official correspondence on behalf of the Association

Assist the Board in drafting policies, programmers

Lobby for sponsorship/grants for programmers, seminars

Seek alternative sources of revenue for the association, such as advertising in new
letters etc.

Collaborate with and assist the member support services coordinator in drafting
and preparing programs.

It is proposed that initial funding for establishing and maintaining information/


communication services be sought from sources such as GTZ, UNDP, World Bank and.
After the office is up and running, say over a period of 3 years, it is proposed that the
continued operation be included under the budget of the association office in Matara,
unless external sources in the from of N.G.O grants will continue to be available.
Some revenue, such as from advertising in the newsletter etc. may be earned but would, of
course, cover only a very small amount of the total budget for the information/
communication operation. Considering the benefit of the communication services to not
only the construction industry but to government and the society in general, it is suggested
that funding for operation beyond the initial phase also be pursued from both government
and private sources as well as through the NCASL at the National level.
A budget estimate for establishing and maintaining the office of the
Information/Communication coordinator is included in the section. Budget estimate and
financial plan.

(20)

ACTION PLAN:

5.1.3

Seek funding (grant money) through sources such as GTZ, UNDP, World Bank
and. for establishing Information/Communication services.

Hire a suitable candidate as coordinator of Information/communication.

Establish office for coordinator, c/w all necessary equipment.

Establish work plan for Information and Communication.

Monitor services, evaluate, adjust as required

Initiate new development.

Southern Branch Administration Office.

The current staff of 3, including the administrative officer, assistant secretary and part time
secretary is expected to be able to handle the workload of the administration of the
Southern Branch for the foreseeable future even with a large membership as some of
the duties previously performed, for example by the administrative officer will be taken
over by the information / Communications coordinator and to some extent by the
membership as some of the duties previously performed, for example by the
administrator and to some extent by the member support services coordinator
(correspondence, record keeping etc.)
It is recommended that all activities out of the Southern Branch in Matara be kept under
one roof. However, the current office space in Matara is not sufficiently large to
accommodate an additional 2 people (The two coordinators) over a large period of time.
Therefore alternative space would eventually be required.
The Southern Branch has over the past year or so been working with initial planning of a
move to a new location, a building to be owned by the Association. It is anticipated that
land may be provided by the government (on a long term lease basis) in a centrally
located area of Matara. The building would be 3 or possible 4 story high and large
enough to provide considerable additional space that may be rented out and thus provide
revenue for interest and re-payment on a building loan.
It is estimated that a floor area of approximately 150-200 m would be required to
accommodate the Branch office, including staff area, reception area, meeting room and
wash room facilities.

(21)

ACTION PLAN:

Obtain land for office building

Plan for relocating office,

Design and engineering of building (from task force among Board of Directors)

Seek grants, funds from NGO & Donors to construct building

Relocate, establish rental agreement with tenants, cost recovery.

5.1.4. The Organizational Structure / Board of Directors / Committees


The current structure of the Board of the Southern Branch may be termed horizontal ,
where the Directors at the monthly meetings discuss all issues in a collective setting and
decides on matters brought before the Board. There are no working committees on special
issues or topics, with the exception of the 3 district committees who reports to the board
through their chairman on regional matters. The chairman of the Southern Branch
represents the Association and acts as the spokesman and liaison between for example
governments and the Association Branch. This type of structure puts a lot of workload and
responsibility on the chairman, It is highly recommended that more delegating be done in
order to make the Board operate more efficiently.
The concept of regional representation, as has been implemented recently with the creation
of district committees, is very desirable and certainly enhances the democratic process. It is
recommended that the regional representation be maintained but without empowering the
individual district committees further and without creating separate administrative units to
support these committees. It is proposed that the chairman of the Direct Committees always
be a member of the Board of Directors of Southern Branch. The District Committees could
have any number of members but it is recommended that it be kept at a maximum of 6-7.
The mandate of the District Committees should be to convey concerns from members with
in each District to the Board of Directors of the Southern Branch and to keep the members
updated on matters of special interest to the region.
In order to make the Board more efficient and to delegate responsibility and share the
workload it is proposed that committees on special issues and in special areas of the
associations business established. The committees would operate on a continuous basis
and consist of a chairman and 2 to 4 other members. The chairman should always be a
member of the Branch Board of Directors while the other members of the committee many
be chosen or elected outside of the Board. The Chairman of each committee would report
to the Board at the Boards monthly meeting. The committee would make
recommendations to the Board of Directors and would need approval on any major
decisions.

( 22)
It is proposed that 3 committees under the Board of Directors be established as
follows:

Member support services committee,

Finance Committee,

Communication and liaison committee.

MEMBER SUPPORT SERVICES COMMITTEE


The role of this committee would be to review services programs, to monitor program
performance and help identify new activities. The committee would be working closely
with the support services coordinator.

FINANCE COMMITTEE
The finance committee would be involved in the financial affairs of the association,
expanding into fund raising activities and finding new innovative ways of funding. The
elected treasurer of the Branch should be automatic member of the Finance Committee &
may be it Chairman.
COMMUNICATIONS/ LIAISON COMMITTEE
This committee would be working closely with the information / communication
coordinator. The role of the coordinator would be to ensure good communication between
the membership and NCASL- SB, to promote the association and to liaison with
government departments and agencies as well as with the private sector, chambers of
commerce and industry, Training institutions and universities etc.
Over time the Board may decide to establish other committees, for example standard
committee, and universities etc. Workplace safety committee materials committee etc.
I addition to committees it is propose that task forces be considered for any matters of a
temporary nature that would require in-depth work on the part of the Board of Directors.
As an example, an office allocation or building task force many be established. If an acute
problem arises, for example as a result of a new government regulation and the
communication/liaison committee feels it is beyond its capacity to respond, a task force
may be established for the purpose.
As with committees, the individual task force would report to the Board of Directors and
major decisions would be taken by the Board, Members of the task force would be
appointed by the chairman of the Board or the Board of Directors and could be chooses
from association members outside of the Board. Each task force would have a task leader.

( 23)

ACTION PLAN

To review current activities of the Board


To delegate work to members of the Board and members at large
Establish committees and task forces to work under the supervision of the Board
and in collaboration with Branch office staff.

An Organizational Chart is attached as appendix 2


5.2 Policies and issues relevant to the Board
There is no doubt that the Board of Directors of the NCASL Southern Branch will be
facing many challenges in the years to come. In addition to the activities and issues already
outlined above, the Board will have to expand into areas which may be of a more political
nature.
1.

The southern Branch could take the initiative together with the association at
the national level to collaborate with ICTAD on a review of the current
grading system to find ways in which the individual companies may expand and
develop. One of the means could be to allow for joint venture projects (as is
already being proposed with the new draft contract regulations) and to get the
government to provide contract management and training, for example through
RDA, with a strong content of technology transfer.

2.

Likewise, the Associations should lobby the government and international


lending institutions to require more local participation on large projects that are
tendered internationally. The joint venture concept, whereby international firms
would be required to partner with local firms, have proved in other parts of the
world to provide more technology transfer than just subcontracts to local firms.
The best way for the local industry to gain experience is to participate at the
overall project management level.

3.

The problem with late payment to contractors by government departments has


cost the industry a lot of money. It is a problem that must be solved in the
interest of not only the contractor but also the government. Recovery of
payment, with possible claims of interest and other associated cost is expensive
for all parties involved. The Southern Branch should take the initiative in
collaboration with the Association at the National level to solve this problem
as soon as possible.

4.

A universal mechanism of formula of calculating claims for price increases


on govt. contracts is expected to be implemented shortly in the Southern
province. However, the index that is used lumps all provinces in the same range
and does not allow for regional differences. This issue should be taken up with
the government.

(24)

5.

Skilled technical staff is key to the success in the construction industry. The
Southern Branch together with the Association at the National Level should
take steps to collaborate closely with universities, colleges and other learning
institutions in designing curricular that are tailored to the needs of the industry.
The construction industry through the NCASL should also seek to actively
take part in research and development in construction related fields. This could
be accomplished by having representation on committees at learning and
research institutions and participation in field testing etc.

6.

Good data in economic development forecasting is essential. There Association


must become more involved in the analysis of the economy from the
construction industry perspective in order to respond to changes and to plot
strategies. For example, the recent Tsunami disaster has caused an upsurge in
construction activities, especially in the housing sector. These activities are
expected to slow down over the next 2-3 year glut in the market will follow
unless the momentum can be kept up by moving into new developments. Close
collaboration with the tourism industry, the industrial/commercial sector and
private land development would be essential.

7.

Also of importance is closer collaboration with sectors related to the


construction industry, such as supply and manufacturing of building materials,
pre-fabrication of housing etc. Trade fairs where all sectors come together
would be one way of sharing a common front.

8.

Financing and cash flow is a problem that many - especially smaller contractors
are facing. Apart from pushing for timely payments from government clients
the Association could also lobby banks and other lenders for better terms on
behalf of its members as a collective body.

09

All public sector institutions used out dated rates some time more than one
year old rates for preparing government estimates. This is very detrimental to
the growth of the contractor and the industry and also negative impact on
quality and timely discharges. Therefore there should be mechanism to update
the current rates monthly, which is very important. Use of information
technology and latest software developed for this purpose should be essential.

10

District price fixing committee should be convened at least every two months to
ensure realistic rate out put as the DPF committee rates are the source and
regulation for obtaining rates for government estimates.

11.

Low overhead margin adopted by the public sector (central / provincial )


for the estimates also another hindrances to the enterprises development.
Therefore, it is very important to keep healthy overhead margins to enhance
growth and development of this sector

(25)

12

Non payment of price escalation on ADB Funded projects for less than one
year duration contracts. Small & medium scale contractors who are engaged in
road construction are badly affected due to this reason and this is the man
contributing factor for slow growth of this sector. NCASL should take up this
matter with he ADB and government to obtain escalation payment, as inflation
rate is very high in Sri Lanka when compared with other countries.

13.

The cost of finance is very high.


Interest rates of loan and tedious guarantee procedures are major and severe
constraints. Therefore NCASL should take this matter up with the government
and Donor agencies to secure affordable and low interest loan schemes to its
members as well as improving access to finance.

14.

Major specialist constructors and specially S&M scale constructors are not
effectively integrated into the policy-making process and that government could
do more to improve mechanisms to ensure greater voice for S&M constructors
where they can influence the content of existing or proposals, regulations
systems, process and laws pertaining their business

15.

High transport cost is yet another obstacle for growth and development of S &M
scale constructors. NCASL with support from the government should take
actions to obtain duty free transportation vehicles such as Dump truck, Tipper,
crew cabs, etc. which will facilitate sector productivity.

16.

It is the NCASL view that poor preparation of the project and works including
lack of proper investigation was a real nuisance which is spreading,
insufficiently documented and poorly prepared bidding documents mean
necessary poor quality in the products as well additional costs, delays, claims,
damages to human, social and natural environmental etc. This also badly affects
the growth and development of builder. Moreover poor preparation of the
project prepares the ground where unethical moves from the employer and /or
his agents are likely to flourish. Therefore NCASL and government should take
some steps and actions to enhance quality systems, procedures to ensure
Quality Engineering which in turn affect the Quality Construction

17.

It is obvious that the regional construction industry is chronically week in


knowledge, experience and resources. It is also demonstrated that National
Construction Association of Sri Lanka can play a powerful, role in
strengthening the industry capabilities. A strengthened, sustainable, NCASL
will have practical value for local contractors, construction workers,
professional and supervisory staff, clients, communities, the government and the
Sri Lanka nation as a whole

(26)

5.3

Budget Estimate and Financial Plan:

A budget estimate, including current and future proposed activities of the Southern Branch
has been prepared into day cost as follows.

CURRENT 2005/2006 BUDGET ESTIMATE ANNUAL


Salaries to staff and engineering consultant
Office rent and maintenance
Stationery, telephone. Fax/e-mail/postage/printing
Subscriptions
Publishing
Travelling/ Transport/ allowances
Mise, refreshments, advertisement
AGM and other expenses

Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs

502,200.00
91,700.00
106,000.00
14,400.00
10,000.00
17,000.00
21,000.00
33,500.00
--------------795,800.00
========

NEW PROGRAMS AND ACTIVITIES (IN 2006 VALUE) ANNUAL


(APPROXIMATE)
International consultant from the Doner Agenciy
(Contractor Development)
Information/ Communication coordinator
Member support services corrdinator
Three additional field consultants
(Galle, Matara and Hambantota)
Three technical officers
Two computer operators
Transportation *
Office rent (Field officers and branch officer)**
Officer supplies, maintenance
Stationery
Postage, Printing
Telephone, fax, e-mail, utilities
Clerical assistance, misc.
Contingency
Electricity &Water
3 Vehicle Hire including fuel
On mouthy Basis

Rs. 10,000,000.00 (USD100,0000)


Rs.
900,000.00
Rs.
900,000.00
Rs.
Rs
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs .
Rs.

2,340,000.00
1,800,000.00
240,000.00
500,000.00
720,000.00
60,000.00
50,000.00
60,000.00
180,000.00
156,000.00
1,000,000.00
60,000.00
1,800,000.00
--------------------Rs 20,766,000.00
============

(27)

OTHER ACTIVITIES

Seminar, workshop & Training Programmers


Rs 1,250,000.00
International site familiarization tour (Provincial)
Rs 2,000,000.00
Consultancy and advisory services for formation of
joint ventures
Rs 3,000,000.00
Establishment of Research Centre to
Rs 5,000,000.00
Conduct servers Research etc. (provisional)
Construction of NCASL (SB) matara office
complex (Training centre, Information centre,
Branch office, auditorium research centre
mediation centre etc.)

Rs 30,000,000.00

(30 purch Land in Matara town


recently donated by the southern provincial councial )
* The transportations estimate is based on the assumption that on field consultant site calls
visit the client member will be covering the meals and accommodation on overnight stays.
** The estimate is based on the assumption that space - in addition to current space for
administration - must be rented in order to accommodate the expansion of activities.
Alternatively the Branch may be looking at building its own office. But rent would still
have to be charged to go towards mortgage (loan interest and repayment).

There will also be capital expenditure involved in the expansion of activities as follows :Computer (2), Printer, Software
Office Furniture
Telephone Fax machine and miscellaneous
Two photo copy machine

Rs.
Rs.
Rs.
Rs.

250,000.00
80,000.00
40,000.00
250,000.00
--------------Rs.
620,000.00
International site visit tour
Rs 2,000,000.00
Total budget, including current and proposed activities Rs. -795,800.00
New Program
Rs. 20,766,000.00
Seminar , Workshops & Training Programs
Rs. 1,250,000.00
Rs 23,840,200.00 USD (224,442)
=========

(28)

The Southern Branch currently receives from the Association Head Office close to Rs.
800,000/= Per year. It is anticipated that another 120 contractors will be forced to join the
Southern Branch following a universal mandatory requirement for NCASL registration in
order to be considered for government projects at the provincial level. It is estimated that
the inclusion of additional 120 contractors would generate approximately Rs. 600,000/= in
dues of which the Southern Branch may be expected to receive Rs. 300,000/= expenditure
in O & Man special programs.
Of the estimated total annual budget of Rs 23.8 M. it is seen that only Rs. 1.1 M may be
covered by the NCASL. It would therefore be necessary to find alternative funding for the
remaining Rs.21.64 million.
Sponsorships have been utilized in the past and have worked well for putting Seminars and
other events but it is not expected to be a significant contributor.
An idea has been brought forward for applying a surcharge to all government contracts.
This surcharge which would be a certain percentage of the contract sum would be paid
by the government to the NCASL. A part form the inherent risk of the bureaucracy it is
nevertheless an idea that deserve further investigation. If implemented it would likely have
to be applied to contracts in all the other provinces of the county.
The expansion of member support services and information / communication services may
be considered a pilot project that could over the time be applied to other branches of the
NCASL. It is proposed that funding for an initial 3 year period be sought from program
offer by agencies such as .GTZ, UNDP, World Bank The Pilot Program should be closely
monitored with progress reports prepared at regular intervals, for example twice annually,
when a review and evaluation would take place.
In reality it is likely that over the time following the initial pilot phase the expended
services to member would have to be funded from combination of the above mentioned
sources, probably with the main source being fee for services. The fees would, of course
have to be set at reasonable rates. It is anticipated, that once the benefit of the services are
staring to show the recipients will consider it a normal expense of doing business.

APPENDIX 2
ORGANIZATION CHART