Rapid infrastructure development – Sea Ports, Air Port, Power Plants, Roads etc…
Sri Lanka’s social indicators are among the best in the South Asian region. The country has achieved near universal literacy (91%) & perhaps more remarkably, the gender gap is narrow, and Sri Lanka is among the top 20 countries, ranked on gender equality by the World Economic Forum.
Excellent health facilities with ample availability of UK qualified specialist doctors.
Per capita GDP reached USD 2,014 in 2008 & the IMF recognized Sri Lanka as a middle income emerging country (2009 - USD 2,057 & 2010 – USD 2,399).
Easily trainable and versatile workforce. Sri Lanka has the second largest pool of UK qualified accountants which helps to compete in the financial and accounting BPO market
English is widely spoken and understood
Greater emphasis on education with particular emphasis on ICT, technical education and English language proficiency
"If you were smart in the 1800s’ you moved to London, if you were smart in the 1900s’ you moved to New York City, and if you are smart now you move to Asia " - Jim Rogers Research & Development Unit
OUTLOOK ON SRI LANKA Fitch Ratings India BBB- Why invest in Sri Lanka
It is important to note that even during its darkest moments Sri Lanka’s GDP growth fluctuated between 4%-5% over a period of 20 years, signaling the economy’s substantial resilience to shocks & adverse conditions.
Free Trade Agreement (FTA) with India clearly demonstrates the goodwill & commitment between the two nations. The agreement creates investment opportunities for local & multinational firms based in Sri Lanka seeking business opportunities in India.
Sri Lanka has climbed nine positions from 2009 to be ranked 59 among 110 nations, in the World Prosperity Index – 2010, by the Legatum Institute, a UK based independent research institute. Sri Lanka is also the highest ranked country among South Asian nations. In the overall rankings Sri Lanka is just behind China, ranked 58. Among other South Asian nations India has been ranked at 88, Nepal 91, Bangladesh 96 and Pakistan 109.
Sri Lanka Poised for Rapid Growth: S&P India BBB- Bangladesh BB- Pakistan B- Moody’s India Ba1 Bangladesh Ba3 Pakistan Ba3 Research & Development Unit Fitch & S&P Grading AAA AA A BBB BB B CCC CC C D (+)/(-) Moody’s Grading Aaa, Aa, A, Baa, Ba, B Caa, Ca, C (1)/(2)/(3) Standard & Poor’s B + Stable Moody’s B 1 Stable Fitch Ratings B + Positive HSBC BB- Stable a – Provisional e – Forecast Source: CBSL Annual Report 2010 GDP Growth Rate (%) 2010 4Q 8.6 2010 8.0 2011 e 8.5 2012 e 9.0 2013 e 9.5 2014 e 9.5 Per Capita GDP (USD) 2009 2,057 2010 a 2,399 2011 e 2,794 2012 e 3,200 2013 e 3,660 2014 e 4,190
Sri Lanka - Key Indicators Research & Development Unit
Sri Lanka - Key Indicators (Cont…) Research & Development Unit
Sri Lanka - Key Indicators (Cont…) Research & Development Unit
Medium Term Macroeconomic Framework 2010 – 2014 (a) Revised, (b) Provisional (c) Excluding receipts of Asian Clearing Union, (d) External official reserves include the proceeds from the IMF Stand-by Arrangement facility-2009. (e) Total debt service payments as a percentage of earnings from exports of goods and services, (f) Year-on-year growth in end year values Sources: Ministry of Finance and Planning, Department of Census and Statistics, Central Bank of Sri Lanka Research & Development Unit Indicators Projections Real Sector Units 2009 (a) 2010 (b) 2011 2012 2013 2014 Real GDP Growth % 3.5 8.0 8.5 9.0 9.5 9.5 GDP Deflator % 5.9 7.3 6.0 5.5 5.0 5.0 Per Capita GDP US$ mn 2,057 2,399 2,794 3,200 3,660 4,190 Total Investment % of GDP 24.4 27.8 29.5 32.0 33.0 34.0 National Savings % of GDP 23.7 24.7 25.8 29.1 30.7 32.3 External Sector Current Account Balance % of GDP -0.5 -2.9 -3.7 -2.9 -2.2 -1.7 Overall Balance US$ mn 2,725 921 775 525 825 1,325 External Official Reserves (c) (d) Months 5,097 6,610 8,004 8,938 9,668 10,281 Debt Service Ratio (e) % 18.9 14.6 13.5 16.2 12.6 14.3 Fiscal Sector Current Account Balance % of GDP -3.7 -2.1 -0.8 1.0 1.7 1.6 Overall Budget Deficit % of GDP -9.9 -7.9 -6.8 -5.2 -4.8 -4.8 Financial Sector (f) Reserve Money Growth % 13.1 18.8 14.5 14.5 14.5 14.5 Broad Money Growth (M 2b ) % 18.6 15.8 14.5 14.5 14.5 14.5 Growth in Credit to Private Sector % -5.8 25.1 18.8 17.1 16.4 15.9
Overall, taxes have been cut and a complicated system smoothed out. Tax incentives for large investments and tax concessions on profits from listed debentures and equity for foreign investors.
Lower tax regime Relaxation of strict foreign exchange controls and BOI Reforms
The new measures are expected to boost dollar liquidity while the rising trend of the rupee may also attract off shore interest, as has happened in the treasury securities market. Restrictions on inflows to open up new business offices also have been eased. Reforms at the Board of Investment of Sri Lanka are expected to further reduce red tape.
A clear focus on cutting the budget deficit and other prudent public finance measures in the budget should boost state revenue and hopefully curb the budget deficit to a 19 year low of 6.8 % in 2011.
Lower interest rates
Higher liquidity from reduced taxes is expected to keep interest rates in check and encourage more economic growth. This will also soften the impact of government domestic borrowing.
Infrastructure projects worth over USD 6 Bn have been given priority with a public investment figure of Rs.413.7 Bn (USD 3.7 Bn) budgeted for 2011.
Infrastructure development Research & Development Unit
“ Sri Lanka has what it takes to be the Wonder of Asia”
Above all, implementing policies that promote the inclusion of all segments of society in the growth process, as envisaged in the ‘Mahinda Chintana’, will be crucial.
Dr. Ngozi Okonjo-Iweala also announced Sri Lanka’s eligiblity for IBRD financing – funding from the Bank’s non-concessional window.
IDA resources will continue as it is important that Sri Lanka benefit from these highly concessional resources to support its post conflict reconstruction and rehabilitation needs. Together, these financing sources have the potential to significantly increase the amount of resources available on an annual basis.
This is an important recognition of the middle income country status of Sri Lanka and signals a different sort of relationship going forward – a relationship that is founded on knowledge sharing that complements the available financing.
Dr. Ngozi Okonjo-Iweala, Managing Director of the World Bank, during her two day official visit to Sri Lanka had stated that Sri Lanka has what it takes to be the Wonder of Asia through inclusive growth acceleration.
To get there, raising investments, improving productivity of those investments through innovation policies, skills development and macroeconomic stability will be important.
Research & Development Unit
Ease of Doing Business in Sri Lanka According to the World Bank’s ‘Doing Business 2011’ report, Sri Lanka’s Ease of Doing Business ranking has remained unchanged from 2010 at 102 nd out of 183 other economies. Research & Development Unit The President of Sri Lanka in his address to the United Nations General Assembly (2010) had stated that Sri Lanka aims to improve its ‘Doing Business’ ranking to 30 by 2014. Central Bank of Sri Lanka (CBSL) together with the Ministry of Economic Development is coordinating the strategy to achieve the goal articulated by the President. The Budget for 2011 has already made significant strides to simplify taxation, and thereby improve the ranking in the area of “Paying Taxes.” There is also ample scope for eliminating a large number of “procedures” involved in various areas by establishing “one stop shops” where an entrepreneur needs to submit required documents at one point only and all the necessary formalities and clearances are undertaken by the agency concerned. This could be effectively done in the area of Dealing with Construction Permits and Trading Across Borders. In the area of land registration, introduction of title registration could reduce time involved substantially. Court procedure also has to be closely studied in order to devise a method to reduce the delay and improve the ranking in Enforcement of Contracts. CBSL will be looking at other aspects also to facilitate business. In particular, to reduce the time and effort spent on searching for information, CBSL has already produced a booklet “A Step by Step Guide to Doing Business”, which contains necessary information needed by an entrepreneur during each stage of operating a business. (For more info - web: www.cbsl.gov.lk , Tel: +94 11 2477377) 2011 2010 India 134 135 Bangladesh 107 111 Maldives 85 96 Pakistan 83 75 Singapore 01 01
Sri Lanka Moves up in the Economic Freedom Index Sri Lanka has moved up considerably in the “2011 Index of Economic Freedom” released by The World Heritage Foundation and the Wall Street Journal. Sri Lanka has been ranked as the world’s 107 th (from 183 economies) freest economy in 2011, higher in comparison to the 120 th place in 2010. Research & Development Unit
The country’s overall economic freedom score was 57.1 which is an improvement of 2.5 from the 2010 figure of 54.6, reflecting major gains in trade, monetary, and investment freedom.
Sri Lanka is ranked 19th out of 41 countries in the Asia–Pacific region, and its score improvement is one of the 10 largest in the 2011 Index.
Hong Kong and Singapore topped the ratings, finishing one and two, respectively, for the 17 th straight year.
But Singapore cut into Hong Kong’s lead significantly, mainly on the strength of a better score in anti-corruption and a significant gain in financial freedom.
The third and fourth place finishers also remained the same: Australia and New Zealand, respectively.
Areas for further improvement & some concerns… Research & Development Unit Source: www.imf.org
Sri Lanka as a Dynamic Global Hub – Five Hub Concept
Sri Lanka will be developed as a major global naval/logistics hub in the South Asian region for trade, investment, communications & financial services. Sri Lanka is strategically positioned at the crossroads of the eastern & western sea routes. It is located at the entry point of South Asia from Middle East, Africa, Europe & America.
The Colombo port ranked as the number 01 port of South Asia & the 26 th of the world in 2010. The Colombo port is computerized & linked to all major freight stations. The proposed Colombo south harbor will be located west of the present south west breakwater in an area of approximately 600 hectares.
The Galle port is the only Sri Lankan port that provides facilities for pleasure yachts. The increase in arrival of yachts has revived the tourism industry of the country in general & of Galle in particular. The development of the Galle port as a tourist destination will act as a catalyst for the economic growth of the southern region of Sri Lanka.
The Trincomalee harbour is the fifth largest natural harbour in the world & the availability of water & space is about 10 times as much in Colombo. Trincomalee is identified as a suitable harbour for bulk cargo heavy industries, tourism & agriculture.
With the objective of port & regional development ,the government of Sri Lanka is promoting the development of ports like Hambanthota and Oluvil to be a catalyst for the growth of eastern & other rural areas of Sri Lanka.
Colombo South Harbour Development Project Area Approx. 600 hectares. Scope Four terminals of over 1,200m in length each to accommodate 3 berths alongside depths of 18m and provision to deepen to 23m to accommodate deeper draft vessels of the future. Stages Two stages. The 01 stage - infrastructure - USD 300 Mn and 02 stage - terminal facilities - USD 700 Mn Engineer Scott Wilson Ltd – UK Contractor Hyundai Engineering & Construction Co. Ltd., Korea In 2010, GOSL signed a USD450 Mn deal with China Merchants Holdings and Aitken Spence to build the first of the 03 terminals. Each terminal is expected to add the capability to handle 2.5 Mn TEUs more. The port now handles 4.5 Mn TEU. Hambantota Port Development Port of Hambantota is planned to develop as a Services and industrial port. Cost - Phase 1 : USD 361 Mn (85% funded by the Ex-Im Bank, China) Duration : 39 months. The port will be able to berth 04 vessels on completion of the first phase. Sri Lanka is situated along the major east-west shipping routes between the Malacca Straits and the Suez Canal which links Asia and Europe. An estimated 36,000 ships including 4,500 oil tankers use the route annually and daily around 200 vessels pass the southern sea of Sri Lanka. The second phase of the port will include a container terminal and the third phase a dockyard. Upon completion the port will cover 4,000 acres of land and accommodate around 30 vessels. The contract for the Second phase of construction of the Hambantota Port was awarded to a Chinese Company on December 31 2010, CHEC Ltd. signed on for the Engineering, Procurement and Construction (EPC) of the Hambantota Port. The contract value amounts to USD 810 Mn with a construction period of 36 months. Port of Trincomalee Trincomalee harbour is the second best natural harbour in the world and the available water and land area is about 10 times as much as the Port of Colombo. Trincomalee was tentatively identified to cater for bulk and break bulk cargo and port related industrial activities including heavy industries, tourism and agriculture etc. At present SLPA is in the process of re-developing Trincomalee as a metropolis growth centre. SLPA plans to advertise internationally and locally to call for proposals from potential investors for Industrial Park and Tourism Zone. Research & Development Unit
Oluvil Port Development Stage I Contract Period : 27 months Estimated Cost (Stage-1) : Euro 46.1 million Source of Funding : Denmark (DANIDA) Government of Sri Lanka, in its plan to give impetus to economic development in the Eastern region, has decided to build a port at a site in Oluvil under the “Nagenahira Navodaya” Programme which was launched to expedite the development activities in the region. This port will form the southeastern link in the developing chain of coastal harbours in the country and will provide more convenient and cost effective access to and from the southeastern region for goods and cargo originating on the west coast. The proposed project is comprised of the construction of a commercial harbour and a basin for the fishing crafts and it covers a land area of 60ha in the first stage and 105ha in the second stage. The harbour basin would cover an area of 16ha of the sea and would spread 1.2km along the coast line. Stage II - Developing the Harbour to cater to 16,000 ton ships, Increasing harbour basin depth to 11 m. Construction of additional 470 m quay wall & other structures. Port of Kankesanturai and Point Pedro Another rehabilitation and improvement project is planned for Kankesanthurai (KKS) Harbour, to include the repair of the breakwaters, piers and roads, including dredging and wreck removal and the harbour basin. To ensure cargo handling work continues without interruption, the SLPA committed by utilize its own funding to carry out emergency repairs to the breakwater and dredging of the basin. In the meantime the government of India has indicated willingness to grant USD 23 m for removal of wrecks and construction of a New Pier. Out of four barges damaged by the Tsunami in December 2004 at PPD – Point Pedro, three of them are beyond use. Two new barges were fabricated with funding from National Budget and SLPA Budget. Additionally the feasibility of developing Point Pedro to the level of an SLPA regional port for the Northern Province will be explored. Research & Development Unit Sailboat Manufacturing in Sri Lanka Barramundi Boatyard Pvt Ltd., which is a BOI approved manufacturer of Luxury sailboats has released their second sail boat, which was made in Sri Lanka in Weligama. Ships & Boats manufacturing sector, which recorded a 57.81% growth in 2009, had grown by 38.9% on average over the last three years.
A new Colombo Fort redefined According to zoning plan of the Colombo City, the Fort area is classified as a concentrated development zone. The most prominent of land marks in the area are the crossroad of Chatham Street & Janadhipathi Mawatha, formerly Queens Street. A transformation to the Fort takes place from transworks building that is based on lower Chatham Street in the heart of the fort or Colombo 1, which is set to become the epicenter for the transworks square designed by the UDA. Colombo Fort area will be reconstructed with increased accessibility for conducting trading activities.
Commercial Hub – COLOMBO
Port City in Galle Face The UDA and the Sri Lanka Ports Authority (SLPA) are now planning to reclaim land from the sea and build a 400-acre port city under the Galle Face development project. This is expected to cost around Rs. 30 bn and will be completed in 03 years. The city includes hotels, apartments, malls, yacht marinas & a golf course. Residential housing The Mount Mary mixed development project aims at demolishing the now dilapidated & underutilized housing units along Dematagoda to make way for the construction of new commercial housing.. The lands owned by the state timber corporation along Baseline road in Orugodawatte will be used for high density housing. Eco- Friendly city The scenic road around the beira will open up space for jogging & walking while the waters will provide rowers with a place to exercise their skills. The green & blue concept initiated under the Sir Patrick Geddes plans to make Colombo a green destination back in 1921 will be put into operation today with the dream of making the city of Colombo “The garden City of the East” Research & Development Unit
Developments in Colombo at a glance
Provision of alternate dwellings for aprox. 70,000 families living in city slums within Colombo city.
Freeing land for development via clearance of unauthorized structures and shifting govt. offices out of Colombo.
Restoration and redevelopment of historic buildings.
Creation of pedestrian-friendly locales & changing the character of city into a green urban environment.
Reclaiming 400 acres of land from the sea and creating a new city on the reclaimed land.
Upgrading Galle Road, the Marine Drive and expansion of the one-way system.
Introducing dedicated parking spaces, disabled crossings and strict enforcement of road rules
Introduction of an alternative transport system via development of waterways and a ferry service
Greater Hambantota Development Project New Town – Siribopura Siribopura town which is located 1.5 km north of Hambantota town is to be re-modeled to act as the administrative and financial centre for Hambantota. All the administrative functions to be relocated in the new town by end 2010. Establishing a separate 15-20 acre area for financial related institutions including banks is also considered. At present UDA has given approval for 10 banks (CBC, HNB, Sampath, Seylan, PB, BOC, NDB, NSB, Ruhunu Development Bank, Sanasa Development Bank) to locate their branches in the identified location. Many banks have proposed to establish their regional offices here. (please see appendix map, area marked as ‘CBD 1-Siribopura’ within the demarcated area for the New Town development) A commercial centre for the new town has also been identified. The Hambantota urban council has been proposed to be upgraded to a Municipal Council in 2011 and the Divisional Secretariat – Hambantota is also to be re-modeled to suit the present conditions of the area. Sri Lanka co-hosted 2011 cricket World Cup-semi finals with the introduction of a new cricket stadium in Hambantota. Hambantota Cricket stadium with its state-of-the-art amenities was added to the ICC`s list of main cricket venues in the world. International Cricket ground (Suriyawewa) Hambantota International Airport will be the second international airport of Sri Lanka, the length of which will be 3.5 km, where even the largest aircraft can be landed. The airport, estimated to cost USD 210 Mn, will cover an area of 2,000 hectares. Hambantota airport will be one of the green airports in the world and will commence its commercial operations in 2013. It is estimated that this project would generate over 50,000 direct and indirect employment. Mattala airport would cater 60% for cargo handling & 40% for passenger handling. International Airport Hambantota (Mattala)
Hambantota International Seaport (Magampura Harbour) This is expected to be one of the three major harbours of Sri Lanka and will attract a considerable percentage of 36,000 ships that pass Hambantota using the East-West global shipping route at present and currently divert to other regional ports for their supplies, spending additional money and time. The first phase (one of the three) of the harbour was completed in December 2010. The first phase facilitates the anchoring of three ships. The total investment for Phase 1 - USD 361 Mn.
Commercial Hub - Greater Hambantota Development Project
Investment Promotional Zones Located in Siribopura, Hambantota, the project started in 2006 with Korean aid. It has direct access to the southern expressway between capital Colombo and the other regions. Commonwealth Summit 2013 is proposed to be hosted at HICC. The high end apparel industries are based at Bata-atha, Mirijjawila, and Beliatta. Export Processing Zones yield many opportunities for investments. The government has already implemented its plans to develop the Hamabantota district as a business friendly district that actively pursues the government policies on economic liberalization with emphasis on private sector investment. The investment promotion zone is part of the government plan to develop Hambantota as an economic centre. The Government has allocated 1100 hectares (2717 acres) of state land in Hambantota, to be used as an Investment Promotion Zone. The Board of Investment of Sri Lanka will allocate this land within the IPZ to the prospective investors on a 50 year lease basis. The investments will cover diverse industries and sectors. Hambantota International Convention Centre (HICC) The Hambantota International Sports Hub (HISH) will consist of vivid sports utilities: Sports Business Enterprise Park, Athletics Stadium, Warm Weather Training Facility, Cycling Development Centre, Hockey Centre, 18 Hole Golf course, Squash Centre, Aquatics Centre, Rugby & Football Development facilities, Multi Sports Halls & State-of-the-art media centre. This sports complex figures prominently in Hambantota’s bid to host the Commonwealth Games in 2018. Hambantota International Sports Hub (HISH) Research & Development Unit
Hotels and Tourism Development Main attractions: Angulmaduwa Brassworkers Bundala National park Deep South Tourist City – Hambantota Kataragama Jungle River Safari Mulkirigala rock monastery Kudawella blow hole – Hummanaya Tissamaharama Kirivehera Kirinda Situlpawwa Temple Ussangoda Yala National Park Udawalawa National Park
With the increase in tourist arrivals to the Southern region, a large number of hotels will be constructed. Approval has been given to top hotel brands to commence construction. Hotels which are currently operating in the area are to be upgraded.
Seven Star Hotel – Shangri-La Hotels & Resorts, a world renowned luxury hotel chain
03 Five star hotels
Artificial Island with an area of 15-20 acres – inspired by the Santosa Island of Singapore.
A Resort with an 18 hole golf course
Old Hambantota city to be developed as a Tourist city
Botanical Garden & Singha Safari Park at Ridiyagama
Research & Development Unit
Commercial Hub - Greater Hambantota Development Project (Cont…)
Location : 65 acre industrial estate in Atchchuvely Cost : Rs. 199 Mn (GOSL – Rs. 25 Mn., India – Rs. 174 Mn.) Commencement : 2011/2012 Reactivation of Atchchuvely Industrial Zone – Jaffna
The infrastructure facilities will be developed by the Industrial Development Board and Board of Investment.
It is expected to generate 4000 direct employment opportunities.
First phase – 25 acres will be developed with 04 large apparel companies waiting to operate with an investment of USD 3 Mn each. 48 SMEs will commence their businesses.
The industrial zone was operational in 1971 and ceased functioning in 1990 when the war broke out.
Commercial Hub – Jaffna Revival
The medical sector has been slow in moving into the north compared to other service sectors like banks, insurance & finance companies. This project is the second stage of the expansion program of the central nursing home which is already in existence. Construction began in 2010. This project is expected to be a fillip to the medical sector in the North. World class hospital in Jaffna soon A Credit Agreement for USD 416 Mn for the construction of the Northern Railway line was signed between India and Sri Lanka. The construction of the railway line will be carried out in three segments, from Madhu to Talaimannar, Madawachchiya to Madhu and Omantai to Palaly. The Indian government-owned Transport IRCON, is rebuilding the 110 km rail track from Medawachchiya to Talaimannar in two phases, which is expected to be completed by end-2011. Cost: 149.7 million dollars. Rebuilding of Northern Railway line The 288-metre-long two-way Sangupiddy Bridge declared opened in January 2011, linking the shortest land based route between the South and the Jaffna peninsula. This bridge built at a cost of Rs 1,037 million on a soft loan from Britain will reduce the travel time through A- 32 Highway, between Colombo and Jaffna by 110 km (three hours). Sangupiddy Bridge Research & Development Unit
Many experts are calling Sri Lanka the “Hong Kong of India”. Sri Lanka will benefit from its proximity to India, just as Hong Kong benefits from being a trade hub to China.
Indian Investments in Sri lanka
Mphasis moves to Colombo Mphasis, the fastest growing IT Company in India, has invested USD 3.5 mn in their global delivery centre in Colombo. There vision being that Sri Lanka is a poised in achieving a high economic growth with much potential and the talent and capabilities of Sri Lanka’s IT professionals. This would create 500-1,000 employment opportunities. Research & Development Unit Seventy percent of the volume handled by the Colombo port is transshipment of goods imported by India. Sri Lanka has embarked upon a plan to increase capacity by circa 50% at the Colombo port in three years. Currently volumes handled by the Colombo port include 75% of transshipment goods whilst the balance accounts for import/export boxes. India & Sri Lanka are expected to sign a new economic agreement covering both goods & services. Due to the FTA with India bilateral trade volumes were up from USD 658m in 2000 to USD 3.04 bn in 2010. Sri Lanka enjoys a free trade agreement with Pakistan, in addition to India. It also has a preferential trade agreement with its south Asian neighbors, which is currently in the process of becoming a free trade agreement. Sri Lanka also benefits from special concessions from China, Korea, Thailand & Bangladesh.
Indian Investments in SL
Atchchuvely Industrial Zone – Jaffna (USD 3 Mn)
Northern Railway line (USD 416 Mn)
Renovation of the southern railway line (USD 167.4 Mn)
Wind power project in Uppudaluwa (USD 18.55 mn)
Oil exploration in Mannar basin (USD 172 Mn)
Rehabilitation and improvement of the KKS & Point Pedro harbours (USD 23 Mn)
Reconstruction and resettlement in the North (USD 800 Mn)
Fortis Global Healthcare enters Sri Lanka India and Singapore based Asia Pacific’s fastest growing healthcare provider, Fortis Global Healthcare Holdings Pvt. Ltd., buys minority 28.6% stake in Lanka Hospitals for Rs. 4 Bn.
Since 2006, the Chinese Government has provided Sri Lanka USD 3.04 Bn in financial assistance;
Katunayaka-Colombo expressway (USD 292.4 Mn)
Railway extension from Matara to Kataragama (USD 300 Mn)
Norochcholai Coal Power Plant (USD 222.5 Mn)
Hambantota Port Development Project (USD 361 Mn)
Centre for the Performing Arts in Colombo. (USD 21 Mn)
Sri Lanka granted China an exclusive economic zone on the lines of Special Economic Zones (SEZ) to attract more investment from China. The Hong-Kong based Chinese company; Huichen Investment Holdings Ltd will invest USD28 million to develop the zone located in Mirigama.
China has now become Sri Lanka’s largest aid donor replacing the traditional donors from Europe and the West.
Japanese Investments in SL
Improvement of Anuradhapura Teaching Hospital – Rs. 2.9 Bn
Vavuniya-Killinochchi Transmission Line – Rs.1.7 Bn
Improvement of central functions of Jaffna Teaching Hospital – Rs. 3 Bn
New Mannar bridge and improvement of the causeway – Rs. 2.3 Bn
Kandy City wastewater management project – Rs. 19 bn
Eastern Province water supply development project – Rs. 7 Bn
Provincial/rural road development projects – Rs. 18 Bn
Upper Kotmale Hydro Power project – Rs. 50 Bn
Solar Electricity Power generation – Rs.1.1 Bn
Southern Transport Development Project – Rs. 47.2 Bn
Digital Topographic mapping of the Northern Province – Rs. 2 Bn
Research & Development Unit
TOURISM Performance Forbes: ‘ Sri Lanka’s beach stretch from Tangalle Bay to Weligama and Bentota among the Top 10 in Asia…’ The New York Times: ‘ Sri Lanka - the number one holiday destination for the year 2010’… Sri Lanka recorded 654,476 tourists arrivals in 2010 and 2.5 million arrivals are expected by 2016 Visit Sri Lanka Year 2011 - Sri Lanka Tourism Development Authority Tourist Earnings – USD 506.1 Mn in 2010 USD 600 Mn in 2011* , and USD 2.5 Bn in 2016* In 2011, for the first time in the history of Sri Lanka tourism, tourist arrivals had surpassed 250,000 within the first four months. *forecast Over 800,000 tourists expected in 2011
Six Senses Resorts & Spas (SSR) together with the Favourite Group, Auro Holdings and Timex Garments signed an agreement with Aitken Spence Hotel Holdings PLC, in September 2010 to establish its first Six Senses project in Sri Lanka.
This is a Board of Investment approved venture worth USD 45 mn. In addition, SSR intends to make Sri Lanka its Indian Ocean Regional Headquarters in the near future, overseeing new and existing Six Senses properties in the Maldives and Indian Ocean region.
The dual project includes, Six Senses Ahungalla, a resort and spa, including residential villas, on a 10.5-acre plot, adjoining Heritance Ahungalla on the Southern coast; and Six Senses Meeraladuaa, an ecological, environmentally very low impact site, of semi tented structures, on a 27-acre island nearby.
The proposed opening date is late 2012. Six Senses expects an average room rate in the range of USD 400-450.
Sri Lanka: Up Coming Hotel Projects
Shangri-La has already acquired state land by the capital's 'Galle Face' beachfront to build a USD 500 mn multi-use complex with high-end retail facilities, deluxe apartments and a 500-key luxury hotel to open in early 2014.
Shangri-La is also planning to develop a second property, a 300-key city resort on approximately 100 acres of land in Hambantota, on the southern coast of Sri Lanka, to open in 2013.
Shangri-La to open two hotels
China National Aero Technology Import & Export Corporation (CATIC) intends to build a multifunction complex, comprising a five star hotel and a shopping mall with direct investment of nearly USD 500 mn. in Colombo's main beachfront
USD 500mn hotel from China aviation firm
Six Senses Ahungalle & Meeraladuaa to open in late 2012
Swiss-based Mővenpick Hotels and Resorts, which is to manage a city hotel in Sri Lanka's capital Colombo is also looking for opportunities to run a resort elsewhere in the island.
Movenpick has struck a management deal with Sri Lanka's Softlogic group which is planning to build a 24-floor tower hotel in Colombo which will have 224 rooms. The group has a 12-year deal with options to extend another 10 years with Softlogic
Second hotel Scouted by Swiss Leisure Group
According to economic development minister Mr. Basil Rajapaksa, investors connected to Taj Samudra hotel in Sri Lanka's capital Colombo may build another hotel in the same premises.
The Taj group had stated in late 2010 that the existing 5-star Taj Samudra may go through a USD 60 mn upgrade. The group manages a 4-star hotel near Sri Lanka's main international airport and also has a beach resort in the Southwest coast.
Jetwing Hotels is getting into what is called as ‘mixed use development’ at a Colombo property it owns – combining an, exquisite boutique hotel with apartments for rent. At Ward Place, the company is hiring a Singapore architect to create a 60-room boutique and 25 apartments. According to Jetwing Hotels Chairman Hiran Cooray, the company is planning boutique hotels in many other parts as Sri Lanka takes off in the post-war era. Sri Lanka’s Jetwing Group, the third largest hotel group in the island will revamp two of its hotels this year, one in the north western coast of the country and another in the central province, at a total estimated cost of 500 million rupees
Citrus Leisure aims to build a four-star resort with 150 rooms and 28 villas in Kalpitiya. The villas which will have individual pontoons giving access to the sea are to be leased out on 99-year leases to high-net-worth individuals.
Citrus Leisure PLC (Hotel Reefcomber PLC)
A large number of leisure firms have submitted proposals to build hotels and other leisure facilities in 10 islets off Sri Lanka's North Western coast (Kalpitiya Tourism Development). According to Chairman of Sri Lanka's tourism development authority Mr. Nalaka Godahewa, the islands off the coast of Kalpitiya will be given on 30 to 50 year leases, and investors could engage in 40 approved areas including building, hotels, golf course and boat services.
Sri Lanka to get large number of tourism proposals for 10 islets at Kalpitiya
Domestic business groups, John Keells Holdings and Amaya too are either planning and/or started building new properties, expanding / upgrading their properties .
Vallibel One goes for USD 38 mn five star resort hotel
A total of 48 hotels are to be constructed on a 500 acre land in Kuchchaveli. The project with a combined strength of 3000 rooms is to be completed by 2016. USD 30 Mn is being spent to build 4 hotels of 5 star grade. Requests have been received for the construction of 58 hotel projects , of which 26 have already been approved. These include 5 star, 4 star and 3 star hotels.
Kuchchaveli tourism zone
The leisure sector of the Vallibel One Ltd - Greener Water Ltd is to build a five star luxury hotel in Kochchikade, Negombo at a cost of USD 38 mn, according to the private placement prospectus of the company.
The company has already invested Rs. 268 mn on a 14 acre land in Kochchikade for this purpose and hopes to build mega 382 luxury rooms which will be offered to customers at an average rate of between USD 136-165. Apart from the luxury 382 rooms, the hotel will include 42 suites, a spa and fitness centre, 600 seating capacity banquet hall, restaurants, retail arcade, a 1500 square metre outdoor pool, and many other modern amenities.
The construction of the hotel is estimated to take 2 years with commercial operations expected to commence in 2013.
Research & Development Unit
Southern Highway Completion : Mid-2011 Sponsors : JBIC, ADB and GOSL Cost : USD 600 Mn Contractors : Kumagai Gumi, China Harbor Engineering Company, Taisei Corporation Southern highway, the first toll road project in Sri Lanka, is a 126km-long express highway running from Colombo to Matara on the south coast and will be further extended to Hambantota. The speed limit of the express highway is 100km/hr. Once the project is finished, the travel time between Colombo and Matara will be reduced from four hours to 1.5 hours. Colombo-Katunayake Expressway Contractor : Metallurgical Construction – China Cost : USD 292.4 Mn Completion : end 2012 Capacity : 25.8 k.m., four lanes. It is designed for speeds of between 80-100 k.m. per hour which reduces the travelling time to 20 minutes. Colombo-Kandy Expressway Capacity : 6 lanes & 98 km in length. Reduce travel time from 03 hours to 50 minutes. Facilitate vehicle speed up to 110km an hour. Due to land acquisition issues this will be built as an elevated expressway on a concrete wire bridge ‘duct’. Phases : Phase 1- Kadawatha to Ambepussa (48.2km with 4 lanes, is expected to be expanded to 6 lanes) Phase 2- Ambepussa to Katugastota (50+km with 4 lanes elevated) INFRASTRUCTURE Research & Development Unit
Infrastructure (Cont…) Reviving Railways - 12 stations to be upgraded
Investment : Rs. 300 bn (Rs 60mn as investment & Rs 240mn as loans)
Plan : 12 stations would be developed with modern five storey buildings, accommodating shopping malls, hotels rest rooms & luggage locker rooms. Each building has the capacity of putting up high rising towers which could reach over 50 stories, accommodating apartments & office complexes.
Electrification of trains which come to Colombo Fort from Panadura, Veyangoda, Kelani Velly & Negombo. Whole project would need 23 electric trains.
Project cost: USD 180 mn
Outer Circular Highway (OCH) Capacity : 29 km (18 mile) 04 lanes, with provisions to upgrade the road for 06 lanes. Completion : Mid 2013. Access will be provided to all “A” class roads via interchanges and the OCH will have an operational speed limit of 80 km/h. Research & Development Unit
The Government has decided to introduce an Urban Monorail Development Project on the Korea Urban Mono Rail system Technology.
Investment: USD 500 mn (Garam Space Ltd Korea)
First stage - Construction of a railway line from Colombo Fort to Mount Lavinia.
Second stage - Construction of a railway line connecting Colpetty and Battaramulla via Rajagiriya.
Sri Lanka is to start building a 350-metre telecom tower in the capital Colombo and intends to sell shares to the public in a firm to be set up to operate it.
According to director general of the Telecommunications Regulatory Commission Mr. Anusha Pelpita, the tower ,which will be called 'Lotus Tower' is to be built with a USD 100 mn dollar financing from China.
The state is planning to list a 30 % stake in the tower in the Colombo stock exchange in two years.
The telecom tower will be built on land owned by the State Engineering Corporation in Peliyagoda.
Sri Lanka to List Stake in Broadcast Tower Northern Road Connectivity Project Investment : USD 173 mn (ADB - USD 154.4 mn & GOSL - USD 18.6 mn.) Completion : 2015 Activities covered: Rehabilitation & improvement of about 140km of provincial roads with rehabilitation or replacement of selected bridges in Northern Province. Project implementing agencies: The RDA under the supervision of the Ministry of Highways Objective: Improve road connectivity within the Northern Province & between the Northern Province & southern region in Sri Lanka Infrastructure (Cont…) Research & Development Unit
Hambantota International Airport will be the second international airport of Sri Lanka, which is 3.5 km in length, where even the largest aircraft can be landed. The airport, estimated to cost USD 210 Mn, will cover an area of 2,000 hectares. Hambantota airport will be one of the green airports in the world and will commence its commercial operations in 2013. Mattala airport would cater 60% for cargo handling & 40% for passenger handling.
International Airport Hambantota (Mattala)
A New terminal with an additional eight gates is proposed to be built and expected to be completed in 2012.
Mini international airport at Iranamadu
In the Kilinochchi District, 8,000 acres of land in the Iranamadu area has been earmarked to build a mini international airport. The estimated cost is Rs. 70 mn. This would enable passengers to take flights to Jaffna, Mattala and other destinations which are currently being upgraded.
The aim is to increase the passenger capacity from 06 million to 09 million by 2013 with plans to build the region’s first star class airport hotel in BIA. These developments includes, aTransit Hotel Complex - with 24 rooms, Play port – a kids play area, new domestic airport, within the BIA, which could connect to Palali, Trincomalee, Mattale etc.
Major Development at Bandaranayake International Airport (BIA) Research & Development Unit
Cessna Aircraft Company, a US based company, is eyeing Sri Lanka's fledgling domestic aviation industry after the end of a 30-year war has prompted liberalization of the sector and a tourism boom is increasing demand for international flights.
Cessna and their agents for Sri Lanka and Maldives, Infotechs, demonstrated it Grand Caravan aircraft in Sri Lanka, which can carry around 12 passengers and also comes with an optional underbelly cargo pod. A tourist could travel to Arugam Bay, from Colomobo, a journey which takes around eight to ten hours by road, in 45 minutes and to Kandy in 22 minutes which takes 03-3½ hours by road.
US aircraft maker eying on Sri Lanka domestic aviation market
Norochcholai power plant Goal : Construction of a 300 MW coal fired thermal power plant with Infrastructure for 900MW (III phases . Cost : USD 455 Mn. Donor : EXIM Bank – China Engineer : Access Solar (Pvt) LTD
Upper Kotmale Hydro Power Plant Scope : The 150 MW power plant of Upper Kotmale will annually generate 409 GWatts. Stages : The total estimated costs of the Project is US $ 350 million. The Project is expected to be completed during 2011. Over 80% of the project has now been completed; the final stages are presently underway. Contractors : CEB and Maeda Corporation, Japan. Sri Lanka’s biggest wind power project in Uppudaluwa Scope: Seven 1.7MW wind turbines, with a total capacity of 10.5MW, were installed in Puttalam, Uppudaluwa, with a view to increasing wind power generation to 100MW. Stages: USD 18.55 mn, Indian investment. The venture is expected to commence operations by June 2011 . Contractor: Orient Green power Limited, India (OGPL) Oil to Sri Lanka - Search on for oil off Southern Coast 3D seismic data of the 3,400 sq km exploration block has been offered to Cairn India. The data is being analyzed by Cairn’s geologists with a view to identifying the best location to start drilling. Exploration /drilling is expected to commence in 2011 and there is a 60% probability of finding offshore oil deposits. Project: 08 years, 03-stage oil exploration project Contractor: Cairn Lanka (India) Cost: USD 172 Mn or Rs.18 Bn Kerawalapitiya power plant Kerawalapitiya Dual-Cycle thermal power generation plant with a capacity of 300 megawatts was commissioned in February 2010. Cost : USD 222.5 Mn Research & Development Unit
IT sector delegation led by the Board of Investment recently took several important steps in strengthening coordination and facilitating investments to develop Jaffna as a knowledge hub. The objective was to encourage IT companies to start operations in Jaffna by tapping into the peninsula's educated workforce
Jaffna to develop as a knowledge hub
Telecommunications and Information Technology ministry is aiming to increase the IT literacy rate to 75% while optimising IT as a foreign exchange earner by 2016.
75% ICT literacy by 2016 and IT sector as a great export earner Plans Afoot for 15 International Universities
Sri Lanka is becoming an attractive location that could provide higher education for the growing middle class in Asia. Therefore, the Ministry of Higher Education is planning to establish about 10-15 private international universities in Sri Lanka.
The Knowledge Hub initiative will help to develop Sri Lanka as a destination for investments in higher education and position the nation as a centre of excellence and regional hub for learning and innovation. Providing Necessary Infrastructure and Cutting-edge Technology
Over 110 infrastructure development projects are being implemented in state universities at a total cost of over Rs. 10 billion to provide necessary facilities such as lecture halls, hostels, health facilities, administrative infrastructure etc.
Designate and establish a Knowledge City
The government will designate a specific area for the proposed knowledge city and provide improved facilities for international research and education institutions to setup their affiliated institutions. (e.g. Gampaha, Jaffna, etc…)