ADB likely to pull out of Colombo Port East terminal project
The Asian Development Bank (ADB) is likely to pull out of the Colombo Port East Container Terminal project should there be further delays in seeking an investor.
Addressing a media briefing on the Country Partnership Strategy in Colombo on Thursday, the bank’s Country Director Sri Wadowati told journalists that if the project would take too long then they would move out of their role as a transaction advisor.
Ms. Wadowati explained that the ECT Expression of Interest (EOI) was put on hold by the government and that there was no decision on who should be shortlisted.
The government had informed the ADB they would have to wait until the agreement on the Hambantota port project was finalised, it was stated.
“We are following up with the government and waiting for a green light,” the ADB Country Director asserted, speaking during the briefing where the bank announced that it has allocated up to US$1 billion per year for the next five years during 2018-2022 to help Sri Lanka transition to the upper middle income country status.
She said that the assistance from the ADB was closely linked to the government’s policy with two objectives in mind; namely to strengthen the drivers of growth and improve the quality of growth of the Sri Lankan economy.
Sri Lanka in 2016 was positioned at $3835 in terms of per capita GDP and its poverty levels have reduced significantly.
ADB Senior Country Economist Tadateru Hayashi said, “We feel that the basic infrastructure is developed and the road density is the best in South Asia”.
Pointing out the challenges, he identified the declining tax to GDP ratio; the declining trend in exports of garments, tea and rubber; higher incidence of poverty on the estates compared to the urban and rural areas; and the increasing inequality between incomes.
In relation to the poverty concerns on the estates the authorities would be working with the ADB to formulate a plan of action to provide improved health services to the people living on the plantations.
The ADB has 31 ongoing projects in the country spending $3.4 billion, with the Colombo Port Terminal project being a crucial one so far where the bank acts as a transaction advisor.
The bank will look at improving the Ease of Doing Business index by checking on the areas of resolving insolvency, getting credit and enforcing contracts.
As part of its policy reforms with the aim of strengthening State Owned Enterprises (SOEs), the ADB is working with the Ceylon Electricity Board (CEB), the National Water Supply and Drainage Board (NWSDB), Sri Lanka Railways, Sri Lanka Ports Authority and the establishment of an Expressway Corporation.
It was pointed out that the CEB last year was asked to provide financial statements and comply with government targets that would help these types of institutions borrow without government guarantees, the ADB officials said.
As part of their improvements for an Economic Corridor, the ADB is looking at identifying new sectors to promote for export apart from the traditional industries.
Some of the new sectors identified in this regard are pharmaceuticals, machinery, automobile spare parts and electronics.
Plans are underway to engage in the higher education sector by establishing a new university as a public private partnership and move into funding the health sector as well.
The ADB is eyeing the establishment of a Technology University under the PPP model that would increase the country focus on improving sectors like science and technology and research and development.
Moreover, based on government findings and ADB studies it has been noted that there is a mismatch between the demand from the job market and the graduates available. As a result more job oriented programmes would be scheduled catering towards a growing economy.
| Colombo Expressway Corporation | |
| Still in its infancy, the Asian Development Bank (ADB) is looking at establishing a Colombo Expressway Corporation that would ease the burden on the government for continued maintenance of its expressway network. The Corporation would be given a grant of US$1.5 million as a kind of a Special Proposed Vehicle project for the expressway, ADB Country Director Sri Wadowati told the Business Times on the sidelines of the media briefing. She noted that this special agency would be established to ensure it could raise bonds or borrow money without government assistance. |