A boost for investment | Daily News

A boost for investment

The Magampura (Hambantota) Port and the Mattala International Airport were among the many grandiose projects launched by the former Mahinda Rajapaksa administration. Funded mostly through Chinese loans, none of these projects realized the grand objectives with which they were built.

The Hambantota Port did get a second life as a port of call for Roll On Roll Off (RO-RO) car carriers, mainly on a transshipment basis as our domestic car market is rather small. However, this alone was never going to make the port profitable. The Port has ended up with a Rs.47 billion cumulative loss.

The Yahapalana Government inherited this project and the debt burden that goes with it. Given the mounting losses, the question of debt repayment hung in the air. The only alternative was opting for foreign investment for the Port. The Government has now succeeded in this endeavour, after defeating the conspiracies hatched against the proposal and the many lies spread by certain sections of the Opposition.

The Government has found a committed partner in the China Merchant Group, which on Saturday made the first payment of US$293 million as an advance of the US$ 1 billion plus investment. It is no stranger to Sri Lanka, its first investment being the Colombo International Container Terminal (CICT) which has already notched 2 million TEU containers.

The China Merchant Group now has the task of efficiently managing and operating the Hambantota Port, which is strategically located on the East-West shipping route and on the Maritime Silk Road. The 21st Century Maritime Silk Road Initiative, proposed by China in 2013, aims to build trade and infrastructure networks connecting Asia with Europe and Africa along the ancient Silk Road routes. Unfortunately, the Port had not realized its potential until now and hopefully, the new management will be able to turn things around and make it a global logistics hub.

Ironically, the very same politicians who were instrumental in establishing the Port and were agreeable to hand over the port on a permanent basis to a foreign investor launched an agitation campaign to sabotage China Merchants’ investment. They spread many scare stories that sought to drive a wedge between the local community and the investors. However, the Government has now triumphed against all these sinister attempts.

If no foreign investor was found, even the unborn generations would have had to bear the debt burden of this Port. In this regard, Prime Minister Ranil Wickremesinghe has reiterated that, as pledged when the Government assumed office in 2015, the Hambantota Port will be handed over to the future generation without turning it into a burden or debt for them. In contrast to the previous Government’s plans to sell the port outright, this agreement is for a 99-year lease. Moreover, it will be a joint venture between China and Sri Lanka on a Public Private Partnership (PPP) basis.

The next step will be finding an investor or partner for the Mattala Rajapaksa International Airport, which has earned the dubious moniker of the “world’s emptiest airport” with just a couple of international flights per week. There were reports that India had evinced interest in investing in and operating the airport which cost more than US$ 200 million to build. This is a welcome move since the same debt scenario applies to this airport as well. It will be in everyone’s interest to make it a viable, thriving airport which can also function as a MRO (Maintenance, Repair and Overhaul) and Flight Training Centre.

Both the airport and the port will be part of a greater development plan for Hambantota and indeed, the Southern Province. The previous rulers spent massively on vanity projects in Hambantota without focusing on development projects that would actually benefit the people, such as water supply schemes. To its credit, the present Government has embarked on several such projects in Hambantota.

The next step would be the setting up of the Ruhuna Industrial Development Corporation which plans to develop the Ruhuna area into an industrial zone. Hundreds of factories would be set up under the project. Among these will be an oil refinery, a dockyard and a cement factory. Negotiations on these projects have already commenced. Having an airport and a port close by would be a boon to all the export-oriented factories located in the industrial zone. With the Southern Expressway extension terminating in Hambantota, even the local investors will benefit.

Both the Airport and the Port will facilitate Sri Lanka’s aim of becoming an economic and logistics hub in the Indian Ocean region. Hambantota will complement Colombo and Trincomalee as the country’s main seaports, while Mattala can work in tandem with the Bandaranaike International Airport and Ratmalana which is also being upgraded. Mattala can boost the domestic flight network and increase tourist arrivals to the South. It should be a win-win situation for all. The Government has embarked on the right track to dispel the “white elephant” stigma attached to these two projects and make them valuable additions in the drive towards economic and social prosperity. 


 

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