Sri Lanka’s Construction Chamber to set up $200 mln fund to infrastructure projects
View(s):Sri Lanka’s Chamber of Construction Industry (CCI) is discussing with other agencies the setting up of an infrastructure development fund with an initial capital of US$200 million to support the work of its members, a top official has said.
CCI President Surath Wickramasinghe said that it is not feasible for the government to continue to obtain loans from different sources to develop the country at a rapid pace. “Our chamber has been promoting the setting up of our own Infrastructure Development Fund to support our own members as well as to provide funds for infrastructure projects in the country with foreign and local investment,” he said adding that, the CCI and Ceylon Asset Management (CAM) are at present discussing with DFCC Bank the modalities of setting up this fund.
Dr. Wickramasinghe was speaking at the inauguration of the ‘BUILD SL Construction and Regenerating Expo’ held late last month in Colombo and opened by Economic Development Minister Basil Rajapaksa.
Excerpts of his presentation:
“We have already obtained the support and blessings of several Ministries allied to the construction industry as well as from the Governor, Central Bank.
The CCI will be the integral stakeholder in the equity structure and will be its primary promoter. In order to fast track this process, it is essential that a policy decision of the Government empowers financial institutions which hold capital such as the EPF, NSB and even Sri Lanka Insurance to invest in the equity of this venture.
When this fund is set up, the contractors in particular will benefit and be able to bid for multilateral funded projects in Sri Lanka as well as overseas. We anticipate initially to raise around US$200 million and are confident within a short space of time to increase the capital to larger numbers.
Inclusive development of the other provinces is now timely. For this, the Southern and Katunayake Expressways and the outer Circular Highway under construction will become catalysts to achieve this objective. To further accelerate the mega development projects proposed for the Central, North and East of Sri Lanka, the proposed Northern Expressway has now become a prerequisite.
One way of achieving this objective, is to focus development activity off the Northern Expressway with attractive incentives in targeted locations in the provinces where the provisions of the Strategic Development Act can be utilised by the Board of Investment (BOI) to locate mega industries and other commercial activities, in addition to the tourism development which is already taking place therein.
Returns
There may be critics who would say that the cost of the Northern Expressway will not justify its investment. On the other hand, the returns from its construction will catalyse the development taking place not only in the Central, North and Eastern Provinces but also capture the development in the Mahaweli Programme which will then trigger its optimal potential that has not been possible to date due to lack of connectivity.
Furthermore, building the Northern Expressway immediately will prevent escalated costs in another five years or more. If the local consultancy and construction inputs are harnessed the Expressway could be undertaken in sections to enable multiple contractors to participate in its construction.
The CCI will be pleased to assist the Minister and the Government to ‘fast track’ this development programme on a PPP Model along with the BOI and the RDA.
The urgency is acute as globalisation is rapidly taking place, and all countries are competing to attract foreign investment, especially developing countries in Asia. If Sri Lanka lags behind, FDIs will go elsewhere and the loans taken by the Government will not bear fruit.
Tourism-based activity is a lead sector driving the economy in Sri Lanka. However its success will depend on providing world class leisure, recreation and entertainment facilities for the tourists to participate in. Several Asian countries have considered the above as a prime requirement for sustainable tourism development in their countries. Consequently in 2013, Singapore had 15.5 million visitors, Malaysia – 26 million and Thailand – 26.7 million while Sri Lanka had less than two million visitors.
Sports tourism
Their success is that they cater to different types of tourism. Sports tourism which would include sailing and water sports, golf, polo, horse racing, adventure tourism including hiking, biking, climbing, casino tourism, agro-tourism (horticultural and farm-based), audio tourism, educational tourism, heritage tourism, garden tourism, health tourism, eco- tourism, ancestry tourism, rural tourism, bio- tourism, bookstore tourism, creative tourism, music and dance tourism, mystical tourism and winter tourism, wild life tourism, commercial and business tourism, wellness tourism, religious tourism, conventions and conference tourism, etc.
The way forward for an island country like Sri Lanka is to select at least five provinces, in its different parts, where about 1000 acres of land could be obtained, to promote Integrated Resort Tourism Development to meet the Government’s tourism promotion agenda through the development of necessary tourism infrastructure to spur economic growth.
To be competitive with other Asian countries and be able to capture a variety of high spending tourists, the BOI should help the private sector by adopting a policy framework to provide attractive incentives to harness the potentials of the connectivity with other provinces. This type of resort can be implemented with Government facilitation and private sector funding, and the benefits to Sri Lanka would be enormous as much needed foreign exchange and employment generation in large numbers will be possible.
The construction industry also requires its own capacity of human resources to be harnessed. We are facing great difficulty to attract young talent to join the industry despite it being attractive and remunerative and with potential for working not only in Sri Lanka but also in other countries. We feel that at least at the O Level stage leading up to the A Level the syllabus under the Technology subject should include teaching and practical’s in construction. It will enable these students to have basic skills such as fabricators, carpenters, electricians, plumbers, welders, crane drivers, machine operators, etc and to rise up to a Master Craftsman.
Today some of them earn around Rs. 100,000 per month and if they are overseas, it would be much more.”