Investigating the possibility of applying blockchain technology for construction projects during the financial crisis in Si Lanka

Abstract

The construction industry is crucial to the nation's economic development, makes substantial contribution to Gross Domestic Product. However, the ongoing economic crisis, reached to its climax in 2022, had a severe impact on Sri Lanka's construction sector due to significant currency depreciation and rising inflation. The increase in foreign debt and a decrease in tax revenues had led to the suspension of major infrastructure projects. During the past, different countries adopted various strategies while managing the crisis. Blockchain is a technology which has the potential to revolutionize the structure of all accessible networks in the future. Construction companies are increasingly interested in utilizing blockchain to reduce project costs, improve planning, and minimize waste through modern construction technologies and innovative practices. Therefore, a thorough investigation is needed to explore the feasibility of applying blockchain technology for construction projects during Sri Lanka's financial crisis. The study collected both qualitative and quantitative data, utilizing primary and secondary sources. Preliminary interviews were conducted to assess the relevance of information gathered from the literature review. Subsequently, a questionnaire survey was conducted among industry professionals in Sri Lanka, achieving a 46% response rate, to identify the applicability, barriers, and benefits of blockchain-based applications. The research concluded that blockchain-based smart technologies could be applied to construction projects for smart contracts in payments and procurement, as well as during bidding and tender procedures. It also identified critical barriers to implementing blockchain technologies in Sri Lankan construction projects, containing financial resource constraints, lack of customer awareness, and insufficient stakeholder involvement. Advantages of blockchain technology were identified as fraud resistance, the ability to detect and correct misrepresentations or mistakes, improved information reliability, enhanced response times, and disintermediation.