Highway to prosperity | Daily News

Highway to prosperity

The Central Expressway, which was due to be opened in 2019, has been delayed due to a variety of factors including financial constraints. However, some sections are already under construction. The Central Expressway is perhaps the most promising out of all the existing and planned expressways, as it will link many economically significant areas with Colombo via the Kottawa hub.

The Government has just received good news in this regard, in the form of a loan of US$ 1 billion from China as funding for the construction of the Central Expressway Phase I. Chinese Envoy in Colombo Cheng Xueyuan has conveyed his Government’s decision to Prime Minister Ranil Wickremesinghe at Temple Trees. The Chinese ambassador also apprised the Prime Minister that instructions have already been issued to the Export and Import Bank of China to process the loan. The Chinese Envoy has also requested the Government to expedite administrative and legal formalities regarding the loan.

This infusion of capital will no doubt help the Government to expedite the project which will bring massive benefits to the North Western, Central and North Central Provinces. The expressway will be built in four phases – Kadawatha to Meerigama (38 Km); Meerigama to Pothuhera (40 Km); Pothuhera to Galagedara (32.5 km) and Galagedara to Dambulla (60 Km). Significantly, some of the stretches will be built by local contractors, who are second to none anywhere in the world.

A journey from Colombo to Kandy now takes 4-5 hours, whereas the Central Expressway will cut it down to around 90 minutes (travelling at 100 Km/h). This will make a massive difference to the central region. The authorities, under the guidance of Highways Minister Kabir Hashim must now work towards clearing any red tape and expediting the Central Expressway project as any further delays will be costly economically. It is also advisable to complete this project before commitments are made towards other planned expressway projects.

This is not the only project going ahead with Chinese assistance. The Colombo Port City project is perhaps the biggest ever investment in Sri Lanka’s history. It will raise Colombo’s profile as an international financial hub. The Hambantota Port is another very important project. All these projects are no doubt very impressive, but we need more investments to make them really tick. For example, if more factories can be set up near the interchanges of the Central Expressway, it will be really easy to transport the finished products to Colombo for export. Likewise, the Hambantota Port area will be an export-oriented investment zone.

In fact, Prime Minister Ranil Wickremesinghe has referred to these projects at a parley recently, citing three factors that can take Sri Lanka forward: Trade and Exports, Foreign Direct Investment and Infrastructure Development (such as the Central Expressway). These are the most vital cogs in the wheel of development.

Incidentally, Sri Lanka recorded its highest Foreign Direct Investment (FDI) of US$ 1,900 million in 2017 (not counting the US$ 1 billion Hambantota harbour). Several new significant foreign investment projects are underway, including two car assembly plants by Mahindra and Mahindra of India and a team of Japanese investors. A solar panel factory was opened earlier this week to supply local and export markets.

Sri Lanka also recorded the highest-ever exports of US$ 11.3 billion in 2017. A further boost is expected by 2020, though the medium term plan is to reach US$ 50 billion in exports. We need to diversify our exports further and also seek new markets for both traditional and non-traditional exports. The resumption of European and US GSP status is a shot in the arm for exports. New Free Trade Agreements (FTAs) with a host of countries will be a boon for exporters. However, there are many fabrications and misperceptions with regard to the FTAs and similar agreements – there should be a bigger awareness campaign via the media on the benefits of FTAs.

The Government plans to create three more Free Trade Zones in Bingiriya, Kalutara and Weligama apart from the Hambantota Free Trade Zone. This is a significant development, given that between 1978 and 1992, only three Free Trade Zones were developed. While the emphasis is on FDI, local investors too must be encouraged to set up operations within and outside investment zones. We need more investments in the outstation areas and with expressways connecting all the key cities, transporting their products will not be a problem. This will also expand private sector job creation. Sri Lanka has a low unemployment rate of 4.2 percent, but all efforts must be made to take this even lower.

Sri Lanka must make use of its widespread Diaspora network for investment and development. With the Government’s decision to resume granting dual citizenship, many Diaspora members have settled down here for good (reverse migration) to contribute to the country’s development. Many others are willing to contribute from their adopted countries. Further incentives should be granted to expats and Diaspora members who wish to invest in their native country. Development must encompass a multi-pronged approach that combines exports, investment and trade, the three pillars of any burgeoning economy. 


 

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