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dynamic and apolitical Hambantota District Chamber of Commerce, the half-day investment forum held at the Mahinda Rajapaksa International Cricket Stadium at Sooriyawewa was well-attended largely by representatives of private sector companies, individual investors and entrepreneurs.
It was HDCC’s former Director General and currently a consultant Azmi Thassim, a longstanding private sector voice in the south’s strategic city, who emphasised that “Hambantota is happening” in an overall sense and where appropriate “things are happening”. This emphasis perhaps was in response to any doubt not only the participants or those outside the Hambantota District may have had as to whether there is any real progress.
The fact that HDCC has been annually holding a forum during the past few years is also a testimony that Hambantota is progressive and new opportunities are unfolding.
HDCC, which is celebrating 20 years of service this year, has been championing Hambantota, its potential and advantages and also challenges long before the presidency of Sri Lanka was acquired by a person who hails from the very district. 
Why is Hambantota strategic? Private sector perspective
“Hambantota is strategic not solely because the first family is from here but due to several good geographical reasons as well as demographics,” pointed out Thassim. He said the Hambantota District is highly resourceful in terms of land, sea and also air, making it an ideal strategic hub.
This unique position as often stressed by experts in the respective fields was the basis for the Government to have built a seaport and an airport in Hambantota. At the forum SLPA and Airport and Aviation Services Ltd. officials presented the respective cases for same. There were presentations from the BOI and Sri Lanka Tourism as well.
“Our location is very strategic and availability of land is very advantageous. We are a three-hour drive away from at least three important tourist locations – Nuwara Eliya, Arugam Bay and Galle. Given its own diversity, Hambantota is also a major tourist attraction,” Thassim said. The district is home to Sri Lanka’s best-known wildlife park Yala, bird watching at Bundala, Kalamatiya and Rakawa.
HDCC also listed several other resources such as extensive paddy cultivation, good irrigation systems aided by the Walawe left bank; growing of cinnamon, citronella and cardamom, expanding stock of cattle and buffalo leading to a fledgling dairy industry; and inland waterways and lagoons promoting inland fishery, apart from deep sea fishing.
It is also rich with salterns and the district has a dominant position in the salt industry, rice mills, poultry farms and livestock and a growing presence in manufacturing and aquaculture. The Board of Investment also operates two industrial/export processing zones, Mirrijawela and Sooriyawewa.
Recalling Hambantota’s unfortunate past, Thassim said: “Today we are not talking about Hambantota District as one of the poorest. We are experiencing neither unrest nor frustration among our community. In short, things have changed.”
Backing his argument, he said indicators are showing positive growth, living standards are improving and investors are now looking outside the Western Province for opportunities and new growth and are turning their eyes in particular to the southern region.
Growing focus on the south is not just coincidence. One reason is the Government’s own plans for the region, much of it have come to fruition at least in terms of commissioning a brand new greenfield port in 2012 and a new airport in March this year as well as fast-transforming road network in the district arising from the completion of the Southern Expressway.
“The seaport and airport are now operating. The international convention centre will be available before the end of this year. Existing projects will continue to develop and indicators will continue to change. Obviously the businesses and economic environment will change and become more prosperous and stable,” opined the HDCC Consultant.
The Southern Expressway will be extended from Matara to Mattala and a similar expansion will be carried out for the railway network as well. The Urban Development Authority (UDA) has also embarked on building a new township in Hambantota and setting aside the old city as a tourist and archaeological site. Following the construction of the international cricket stadium, the venue of the HDCC forum, Hambantota is also emerging on the global sporting map.
Given these and other projects in the pipeline, Thassim said: “We can visualise Hambantota District in the next five to 10 years when all these projects come to fruition and are operating at their optimum levels.”
He said that new infrastructure and economic activities have triggered a new market and opportunities for a plethora of support services. They are related to sea and air port services, construction, travel and tourism, human resources, skills development and training, management and secretarial, technology transfer, health, communication, financial services and logistics, etc.
HDCC also believes there is further scope for new export-oriented manufacturing, value-added agriculture and fisheries as the sea and air ports provide a platform for faster shipping and alternative energy.
HDCC forecasts that the population of Hambantota which stands at 600,000 will double in the next five to 10 years or reach 1.5 million when migrant population is included as the district becomes a major economic and recreational hub.
Thassim noted given its strategic location amidst sea and air routes and now that proper sea and air ports are operational, Hambantota can aspire to become a hub for South East Asia. “If it (the district) really grows, such is the potential,” he added.
Being Sri Lanka’s first district chamber, HDCC has been in existence for two decades as a local business organisation with direct members who are SMES in the district, traders and sectoral associations and corporate members. “We have a good reputation. We have reached around 3,000 businesses in the district. We also work closely with the political and administrative leadership of the district in forging private-public partnerships for the common good,” Thassim added.
HDCC provides business development services, spearheads dialogue with relevant district, provincial and national level organisations and disseminates information, as well as providing facilitation and coordination. It endeavours to be a ‘one-stop-shop’ dedicated to supporting the business community and its development. HDCC has close relations with national and international level chambers such as the Ceylon Chamber of Commerce, the Manchester, Italy; the Southern Provincial Council; the District Secretariat; the UDA, BOI and EDB and the University of Ruhuna.
“The district had not seen such a scale of development before. As a chamber we are proposing joint ventures between small, medium and large enterprises and entrepreneurs in the district and promoting small, medium and large business partnerships. We also are encouraging public-private partnerships. Additionally we are also seeking transfer of management, technology and innovative financial solutions,” Thassim said.
“We are striving to ensure the economic development of Hambantota District and to facilitate the inward investment that we think it so richly deserves,” he added.
Central Bank perspective on Southern Province resilience and opportunities in Hambantota
Central Bank Deputy Governor Dr. Nandalal Weerasinghe spoke of various business opportunities in the Hambantota District in the context of the wider development of the economy.
Hailing from the south, Dr. Weerasinghe at the onset said the post-conflict period economic developments have been encouraging – an outcome of farsighted policies implemented towards the end of the conflict period together with the peace dividend. He said following rapid progress in the post-war phase, the stage was now set for sustained progress towards a $ 100 billion economy and a $ 4,000+ per capita income in 2016.
“This will be achieved via the Government’s five hubs plus tourism strategy,” he said.
Using a wide range of statistics, Dr. Weerasinghe said the performance of the Southern Province has been impressive. He said the Southern Province contributes 11.5% to national GDP, up from 10% in 2006. The province’s nominal GDP growth in 2012 was 21.3%. The agriculture sector of the province had grown by 2% in 2011/12 whilst industry grew by 40% and services sector improved by 18%. Their respective provincial share was 13.6%, 12.3% and 10.7%.
He also said various socio-economic indicators of the Southern Province were closer to the national level whilst various economic indicators have been improving steadily along with prosperity. “The south is the second most prosperous province in 2011 after the Western Province,” he added.
The CB Deputy Governor said over the next few years, many opportunities that exist in the Southern Province need to be tapped effectively. He said the south has substantial natural resources and advantages. They include minerals (main graphite areas, coral, beach mineral sand, kaolin, serpentine, hot springs); agriculture (tea, coconut, cinnamon, cloves, pepper, coffee, citronella, cereals, pulses, fisheries, livestock); industries (food, beverage and tobacco, textile, wearing apparels and leather, chemicals, petroleum, rubber and plastic, non-metallic mineral products); infrastructure (seaport, airport, expressways, convention centre, international stadium, industrial port, shipping and aviation facilities, railways) and tourism (beaches, river banks, wildlife parks, tourist townships, whale watching, botanical garden in the dry zone, sports activities, historical places.)
He said due to the opening of the sea and air ports, expansion in road and rail networks a host of new opportunities have arisen and will unfold in a greater degree in the future.
Hambantota is also emerging as an international sports city with the district hosting the 2017 Asian Youth Games in 2017. This is apart from having already established itself in the international sporting venues map. “Sports tourism is a fast growing sector of the global travel industry,” he added.
Hambantota will also host the Commonwealth Youth Forum in November 2013.
“The regional business community can benefit by integrating with the value chain of the industries in operation,” Dr. Weerasinghe told participants at the Invest in Hambantota Forum. He also emphasised the need for a strong nexus to be built between the universities and the private sector. In this regard he said the University of Ruhuna needs to play a very special role in the regional development of 
Ruhuna.
“A strong link is required between the university and the business community (agriculturists, agribusinesses, industrialists) in the region. This will be further complemented by the establishment of campuses by several foreign universities in the region,” Dr. Weerasinghe said.
The CB Deputy Governor also said a huge unexploited opportunity in agriculture sector still existed. “The economy of Hambantota District is traditionally agriculture based. Huge untapped opportunity still exists in various areas such as export agriculture, organic farming, agro-tourism activities, flowers, ornamental foliage and ornamental fish,” he said, adding agriculture Technology Parks such as ‘Bata Atha’ can play a pivotal role in technology infusion.
Dr. Weerasinghe also said the fisheries sector has many potential areas of investment. “There is a high concentration of fisheries harbours in the Southern Province. More local multi-day fishing vessels are required to fish in deep seas and there is a need to employ new methods and gears to harvest unexploited and under-exploited species. Many opportunities exist in post harvest processing and value addition. (e.g. fish canning and processing factories, cold rooms and ice plants),” he said.
Dr. Weerasinghe added that the south has favourable conditions for harnessing wind energy. “The southern region exhibits favourable conditions for harnessing wind energy for large-scale electricity generation. The Hambantota Wind Farm is the first commissioned in Sri Lanka (total installed capacity of 3 MW). As the Government policy is to promote nonconventional renewable energy, private sector investors are encouraged to develop wind power plants in the region,” the CB Deputy Governor said.
Hambantota will also have Sri Lanka’s first IT park soon as plans have been made to establish a fully-fledged IT park at Hambantota, which is expected to be operational by 2016-2017.
He said several institutions aimed at providing employment in the IT/BPO sector will be set up and plans are underway for setting up a computer assembling factory. Students are expected to be provided educational facilities at the two universities that would be set up within the park.
“The southern region, especially the Hambantota District, is blessed with enormous business opportunities. It is the duty of you all, the business community of the region, to effectively capitalise on these opportunities and contribute towards national development,” Dr. Weerasinghe told the HDCC’s Invest in Hambantota Forum.
Urban development updates
Urban Development Authority Director Southern Province Architect Ananda Samarasingha said according to the NPPD policy and plan, Hambantota is one of the Metro Regions identified for future development.
“With the implementation of the Greater Hambantota Development Plan and its strategic projects such as the International Seaport, the International Airport, Administrative Complex and the International Convention Centre within the Greater Hambantota area, the need to develop detailed guide plans and urban designs was identified much ahead and we are progressing well,” he said.
According to him, the UDA’s Project Management Division is involved in the preparation of the urban design proposals for the Central Business District (CBD) and the identified major sub centres of the Greater Hambantota area. Considering the rapid development activities within the southern region, five townships have identified by UDA that will have a direct impact. They are Tangalle, Ambalantota, Sooriyawewa, Middeniya and Lunugamwehera.
Samarasingha also said specific areas have been designated for tourism and industries in the Greater Hambantota area.
He updated the participants with the progress of the new city as well as restoration of the old city in Hambantota. The new city will include a banking square, street market, shopping centre, etc.
The UDA is involved in the preparation of the Master Plan and the detailed plans for the combined rail and bus terminal connecting the Southern Express way, Mattala Airport and Hambantota Seaport. This is estimated to cost Rs. 1.7 billion.
A new hospital complex with 850 beds is also coming up. “This will be the first green hospital in the country,” he said, adding it has been designed to comply with Green Rating system.
Board of Investment envisions
BOI Chairman Dr. Lakshman Jayaweera envisioned Hambantota to be a modern metropolis in the future.
He said the BOI has identified a host of sectors with future investment potential for Hambantota. They include tourism, infrastructure, telecom, primary and alternative energy sectors, agriculture and agro-based industries for value addition; furthermore, international 
universities, training centres and research establishments to cater to the overseas market is another sector as well as high tech manufacturing for export. The BOI has also identified medium to heavy manufacturing industries for export, including specialty chemicals. Others include pharmaceutical industries and IT/BPOs.
The BOI Chief also explained how the Government’s five hub strategy fits well with the potential of Hambantota.
He said moves to become maritime and aviation hubs are supported by a world class seaport an airport and the case to make Sri Lanka a logistics hub will be strengthened by the expanding expressways and highways. The Sooriyawewa EPZ will play a key role in realising the knowledge hub ambitions. The upcoming International Convention Centre, the Shangri La resort and positioning Hambantota as a sports city along with its natural attractions make Hambantota a good conduit for Sri Lanka’s drive to boost tourism as well.
“So all major hubs in the Mahinda Chinthana are reflected in Hambantota,” the BOI Chief said.
Commenting on facilities for investors and industrialists, he said Hambantota has two EPZs, Mirijjawela and Sooriyawewa. The Mirijjawela EPZ spans an area of 228 hectares and is being promoted as centre for vehicle assembly, logistics and food manufacturing.
The Sooriyawewa EPZ has an area of 200 hectares under Phase 1 and a further 230 hectares in Stage 2. It plans to house the centre for the it park, an education park, hotels and residential areas, multi sports complex, a media centre and a convention centre. The distance to Sooriyawewa EPZ from the Hambantota Airport is 22 kilometres and 32 kilometres from the seaport with improved road access as well.
Hambantota Port: More expansion
Sri Lanka Ports Authority Director Southern Port Development Agil Hewagegana said the Magampura Port in Hambantota was the country’s first green field port.
“Due to the strategic location of Sri Lanka amidst main sea routes, Hambantota is the most viable location to build a Greenfield port to maximise the efforts to harness this natural advantage,” he said.
The SLPA official said Phase 1 of the Hambantota Port involved an investment of $ 500 million. It included a one kilometre long and 210 metre wide navigation channel with 16 metres depth; a harbour basin of approximately 55 hectares and a depth of 17 metres; a quay length of 600 metres and a 17 metre depth. The port complex also has modern administrative and service facilities, fire fighting, water, electricity and telecommunication.
Phase 2’s cost is $ 800 million and funding has been committed, he disclosed. “Phase II of the project focuses on providing facilities for four container handling berths (quay length of 2,000m), general purpose berths, a dockyard, a flyover, roads, yards, deepening entrance channel and an artificial island.”
The SLPA official said the Bunkering Facilities and Tank Farm Project planned will cost around $ 100 million. This includes 14 tanks with 80,000m3 capacity and installation of loading arms. Of the 14 tanks, eight have been earmarked for bunkering, three each for aviation fuel and LPG.
“The project is almost completed. The pre-commissioning/testing of the bunkering facilities are underway. Discussions are being held with Litro Gas and CPC for the leasing arrangement of the LP gas tanks and aviation fuel tanks. We are confident these will be finalised soon and the facilities commissioned shortly,” Hewagegana said.
He explained that additional work includes construction work of a six-lane road of 2.2 kilometres including box culvert between the Tank Farm and Public Road, construction of a two-lane road of 1.5 kilometres including box culvert between Tank Farm and Harbour Oil Jetty, pipe-laying works for second oil jetty; and supply and installation of eight loading arms. “Work is now in progress and scheduled to complete soon,” the SLPA official said.
For industries, he said Hambantota Port has allocated 529 hectares. Some of the identified industrial activities include a cement grinding plant; cement storage and bagging plant; fertiliser storage/processing bagging plant; LP gas distribution facility; warehousing complex; vehicle assembling plant; flour mill; food processing and packaging and any other businesses related to the import and export sector. The Hambantota Port was made a Free Port via legislation recently, he said, adding that this status enables duty free import and re-export after value addition.
To establish port-related businesses within the Hambantota Port premises, the SLPA last year successfully floated a Request for Proposal (RFP) scheme. The Cabinet of Ministers has given approvals for seven investors. Accordingly, three investors signed the agreements. Their total investment is US$ 670 million. They will commence construction works of these plants during this year. Lanka Sugar Refinery Company has commenced soil investigation at the site, Hewagegana said.
Future of Hambantota
These companies are looking forward to the approvals/permits which need to be obtained from the CEA, UDA, BOI, etc. “These investors are waiting for approvals from these agencies prior to signing the land lease agreement,” he added. Envisaged employment opportunities from the seven approved proposals are 900.
With demand growing to establish presence in the Hambantota Port, he said a second RFP was advertised. “We received 10 proposals. CANC/TEC has recommended seven investors to the Cabinet of Ministers for approvals and is waiting approvals. Recently Cabinet approved five proposals with an envisaged investment of $ 1 billion and employment opportunities of 1,300.”
These projects focus on iron ore; food processing including dates processing, tuna processing, tea blending and bagging, etc.; lubricant 
blending and canning plant; automobile parts manufacturing plant; petroleum and petrol chemical plant excepting PTE manufacturing plant; waste processing including waste oil and waste water treatment; petroleum/fuel storage and transhipment tank farm excepting bunkering fuel; tank farm for edible oil; ship chandelling and ship services and duty free shops.
SLPA is planning a third RFP exclusively for ship building and repair with 45 hectares allocated. Additionally 12.5 hectares have also been set aside for ship chandelling services and small-scale businesses.
Mahinda Rajapaksa International Airport takes off
MRIA Chief Executive Officer Derrick Karunarathna said that MRIA’s capacity in Phase 1 was one million passengers per annum and Stage 2 will expand the capacity to handle five million passengers per annum. The cargo capacity under phase one is 45,000 tons of cargo per annum and will be expanded to have 150,000 tons of cargo per annum under Stage 2.
MRIA can handle 30,000 aircraft movements per annum and its current facilities include 10 parking bays for aircrafts and two aero bridges (one for Code F type aircraft). It also has 12 check-in desks, 10 separate desks each for emigration and immigration, concession areas, an airline lounge and a VIP lounge.
Stage 2 will see MRIA expanded to handle 45,000 aircraft movements per annum; 20 parking bays for aircraft (10+10); and 14 aero bridges (12+2).
The existing cargo terminal area spans 5,000 square metres and includes the Export Cargo section; Import Cargo section; Custom; Plant and Animal Quarantine; two cool rooms and special vaults for high value cargo.
According to the CEO, the overall MRIA project encompasses 2,000 hectares of land and for the first stage 800 hectares have been used, of which main airport infrastructure takes up 400 hectares. The balance is for related industries.
Noting that the infrastructure is in place and future capacity under expansion, Karunarathna said MRIA’s success hinges on a holistic approach.
“Airlines do not fly to airports. They fly to destinations. Therefore there is a critical need for airports to promote the destination,” he said, adding that infrastructure around an airport is a key driver.
According to him, the positioning and benefits of the destination will drive the nature of the airport business. Whereas leisure only destinations drive only tourist traffic, combined destinations will drive both leisure and business visitors.
“We are positioning MRIA as a premier regional hub,” the CEO said. “The Mattala Rajapaksa International Airport will set the new standard for airports in Sri Lanka and the larger region by implementing a true Airport City model to be the premier aviation hub in Asia,” he added.
Karunarathna said going forward, some of the key developments around MRIA will include superior transport network; low cost hotels; 5-star hotels; adventure entertainment parks; top class medical facilities to promote medical tourism; and manufacturing and industrial zones.
“We are confident that given MRIA’s positioning and the overall development thrust in Hambantota, the airport will be a key economic diver of not only the district but the country’s overall development in tourism, commerce and trade,” the CEO added.
He said MRIA will attract potential investors to the Industrial Zone in aviation, agriculture, manufacturing and education.
According to him, lucrative investment opportunities include direct aviation-related ventures; MRO (Maintenance, Repair and Overhaul facilities) for airlines; aircraft painting workshops flying schools and aerospace engineering schools; indirect aviation related ventures; hospitality, recreation and leisure, adventure, freight forwarding, courier services, transportation; associated ventures; industrial park (manufacturing, packaging); knowledge park (schools, academies, universities); warehousing (processing and value addition ).
“With the dual advantage of airport and seaport at Hambantota, a new era of hub opportunities will emerge,” he said, adding that the airport is 20 kilometres from the Hambantota seaport and the synergies will help create a competitive multi-modal integrated logistic hub, offering quickest time for shipments and transhipments.
“In that context Hambantota is a multi-modal free zone to investors,” Karunarathna emphasised. He also noted Hambantota would become an international business hub that offers its valued clients a wide range of valuable features such as strategic business location, excellent logistics and high-capacity world class infrastructure. “Hambantota will be a regional hub with unbeatable cost advantages to investors.”
Potential for tourism and recreation in Hambantota
Sri Lanka Tourism Assistant Director S.P.R. Liyanapathirana said the potential in Hambantota for leisure and recreation for both global and domestic tourist was enormous.
Among tourist attractions in and around Hambantota are Kataragama, Kirivehera, Situlpawwa Temple, Tissamaharama, Bundala National Park, Yala National Park, Kirinda, Jungle River Safari, Mulkirigala Rock Monastery, Ussangoda, Bandagiriya, Madunagala hot water well and the Kudawella Blowhole – Hummanaya.
He said there are 19 hotels in operation in the Hambantota District with a room strength of 1,552. Furthermore there are 24 guest houses with a room strength of 277.
At present nine new hotel projects are under construction with an investment of $ 179 million. These new projects will add around 1,000 rooms. This includes 400 rooms by Shangri La. Additionally nine new projects with a room capacity of 392 and an envisaged investment of $ 40 million has been approved. A recent addition to the pipeline is a 156 room hotel with a $ 40 million investment by Hemas-Manor under the Anantara brand.
He said in all future developments emphasis will be laid on green concepts to make the city environmentally-friendly. Some of the planned development activities in the future within Hambantota include a city hotel for Hambantota township; beach hotels; Tower Hill area development, boutique hotel with museum area; Hambantota Convention Centre; spice garden and restaurant; waterfront hotel at Sooriyawewa; star class hotel in Bandagiriya, Tangalle-Kotugodalla; cultural tourism area; Lunugamwehera city with high elevated land identified for lake front tourism development; and home stay developments.
Specific leisure and tourism related investment and business opportunities include airport transit facilitation; Sooriyawewa Sport Centre-based developments; event management opportunities based on International Convention Centre; golf course; water parks; shopping malls; adventure sports based on Walawa River; floating boat services; caravan vehicle services; taxi services; and boat manufacturing/hiring and light aircraft services/sea plane services based on main tanks.
The HDCC Forum, attended by over 70 representatives from private sector companies, individual entrepreneurs and investors, both 
local and foreign, elicited a host of questions as well as suggestions. The need for more competitive lease rates was emphasised whilst with regard to the Tank Farm project, allowing private sector operators was recommended as well, apart from sharing of infrastructure.
Participants also urged the ready availability of housing and healthcare facilities in the district for employees and investors relocating in Hambantota for their enterprises. Speedy solutions for water were also emphasised. With RFPs to setting-up industries in Hambantota Port exhausted, a fresh opportunity or authorities considering unsolicited proposals was another recommendation.
Among participants were Expolanka Freight Ltd., Hameedia Ltd., DFCC Bank, Employers Federation of Ceylon, KPMG, CommScope Inc., Alufab Plc, Tantri Trailers Ltd., Hayleys Advantis Ltd., Angel Aquarium Ltd., Amazon Trading Ltd., Commercial Bank, Aitken Spence Shipping Ltd., K&K Resources Ltd., MG Capital LLC, Mount Lavinia Hotel, Chelina Capital Corporation Ltd., Wilhelmsen Ships Service, Mandara Rosen, High Commission of Canada, Lanka Special Steels Ltd., Debug Computer Peripherals Ltd., True Value Products Ltd., Asia Capital PLC, Samson International PLC, Celcius Solutions Ltd., Colombo Office of Yunnan Chamber of Commerce, Leoch Lanka, Lanka IOC PLC, Global Sea Foods Ltd., Chanaka Metal Ltd., NDB Bank, M.A. Razak & Company Ltd. and Dipped Products PLC.
