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The urban regeneration of several strategic projects such as the Dutch Hospital, Race Course Development, Independence Square Complex, massive urban regeneration taking place at Slave Island, high-end hotels, apartment complexes and commercial development at Galle Face and the Commercial Company Land are now under construction. In addition, 54 tourist hotels in different parts of Sri Lanka have been completed in this year alone. These are facts and will move Sri Lanka into a new league in development.
Inclusive development
The 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 pre requisite.
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 to locate mega industries and other commercial activities, in addition to the tourism development which is already taking place therein.
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 Program, 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 program 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, the foreign investment will go elsewhere, and the justifiable loans taken by the Government will not bear fruit.
Tourism-based activity
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. 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.
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, agri-tourism (horticultural and farm based), audio tourism, educational tourism, extreme 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, wildlife 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 1,000 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. Asia’s booming resorts use this concept.
To be competitive with other Asian countries and be able to capture a variety of high-spending tourists, the BOI, should direct the private sector by using 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, employment generation in large numbers will be possible.
In addition, the bonus would be that Sri Lanka will be able to preserve and protect the environment in the rest of the country including the beaches to remain in its natural form for the present and future generations to enjoy.
Infrastructure Development Fund
We are aware, for further development of the country at a rapid pace; it will not be feasible for the Government to continue to obtain loans from different sources. Our Chamber (CCI) 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. Several countries in Asia like South Korea, China, Singapore, Malaysia and even India have used this model to fast track development of Infrastructure in their own countries, and it is still happening.
I am pleased to mention, that CCI and Ceylon Asset Management (CAM) are at present discussing with DFCC regarding the modalities of setting up this fund. We have already obtained the support and blessings of several Ministries allied to the construction industry as well as from the Governor of the Central Bank.
The CCI will be the integral stakeholder in the equity structure and 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 and NSB and even the Insurance Corporation, to invest in the equity of this venture.
When this fund is set up, particularly the contractors will benefit and will be able to bid for multi-lateral funded projects in Sri Lanka as well as overseas. We anticipate initially to raise around $ 200 million and are confident within a short space of time to increase the capital to larger numbers.
Human resources
Finally, the construction industry which will be a primary beneficiary of what I have stated so far, will also require its own capacity of human resources to be harnessed. For this purpose, CCI would draw the Minister’s attention that we are facing great difficulty to attract young talent to join the construction industry, despite it being more 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 can include teaching and practicals in construction.
It will enable these students with basic skills such as fabricators, carpenters, electricians, plumbers, welders, crane drivers, machine operators, etc., to rise up to master craftsman in them. Today, some of them are earning around Rs. 100,000 per month and if they are overseas, it will be much more.
