2020 Business and Investment Opportunity Pipeline by OSL
Over the past decade, Sri Lanka has shown steady growth, while significant macroeconomic challenges persist. The economy is moving from a largely rural economy to a more urbanised manufacturing and service-oriented economy. Economic indicators are among South Asia’s highest and favourably compared with those in middle-income countries. Recently, the World Bank graduated Sri Lanka to an upper-middle-income country with a per capita GDP of USD 4,102 (2018) and a total population of 21.7 million.
Sri Lanka is now heading to the polls this week to elect a new president. The election is broadly expected to be a tight contest, with significant implications for development and economic stability in the country. Both the leading candidates have released their manifesto for the November 16 polls, with former Defense Secretary Gotabaya Rajapaksa of the Sri Lanka Podujana Peramuna (SLPP) focusing on national peace and economic development and his contender Sajith Premadasa, housing minister in the current governing coalition and deputy leader of the ruling United National Party (UNP), appears to focus his manifesto towards ‘a strong nation and a fair society’, poor-oriented, and on upgrading the public transport system in Sri Lanka.
In this editorial, we will be highlighting and evaluating the emerging business and investment opportunities to local and foreign investors from both the leading candidates’ manifestos.
Identified Business Opportunities from Sajith Premadasa’s manifesto:
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• Public transport: There will be upcoming tenders towards a multifaceted public transport policy through bus modernisation, railway electrification, Light Rail Transit (LRT) and a smart traffic management system.
• Environment and Energy: implementation of the effective waste management system, and further, a master plan to switch to 100% renewable energy by 2040.
• Financial markets: A new national development bank and a competitive tax regime to accelerate investments to Port City
• Encouraging entrepreneurship and innovation: USD 55 Million added to National Venture Capital Fund and USD 110 million added to National Innovation Fund to enhance the country’s innovation and to encourage entrepreneurs for start-up businesses.
• Structural reforms: Documents, permits and licenses will be available online, or within a day. Hence this will significantly improve the country’s Ease of Doing Business ranking, which currently Sri Lanka ranked in the top amongst the South Asian region.
• Shelter for all initiative: A home-owning society by 2025 and freehold land for permit holders
• A market-ready youth population: ‘Center of Excellence’ at each Divisional Secretariat level to improve communication, language, technology and soft skills of the youth
Identified Business Opportunities from Gotabaya Rajapaksa’s manifesto:
• Development of Physical Resources: If elected the Rajapaksa led government will bring significant infrastructure development to the country in the form of Economic corridors, Industrial and Export Zones, Extension of Toll Highways, Freeways, and further expansion of the Chinese Belt and Road Initiative (BRI).
• Sustainable Environmental Management: Implementation of Waste to Energy Powerplants, efficient countrywide sewerage system, overcoming Open Waste Dumping Practices and access to clean water are primary goals. Sri Lanka produces 7,000 MT of solid waste per day, of which the Western Province accounts for 60%. However, only half of that waste is collected.
• They also pledge to ensure that local and foreign investors can conduct their business in an environment free from corruption, graft, bribery, and intimidation. Further, the time taken for approval of any building constructed will reduce to a total of 3 weeks. Hence implementation of these policies will significantly improve the country’s Ease of Doing Business ranking.
• Improve Bilateral Trade with the rest of the world – They pledge to work closely with India to ensure regional security and also engage with other SAARC and BIMSTEC nations. Commencing Trade activities with developed countries such as the USA, China, European Union, Japan, Canada, South Africa, Australia, Russia, and Britain. Further, Enhancing bilateral trade relationships with the Middle East, Vietnam, Indonesia, Malaysia, South Korea, the Philippines, and Singapore.
• Implement a range of Public-Private Partnership (PPP) Projects to enhance the Education sector:
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o A school transport service for students and teachers will establish as a Public-Private-Partnership (PPP).
o All state universities converted to Smart Learning Universities in the form of Public-Private Partnership (PPP).
o Necessary steps will be taken to upgrade the Maritime University to international standard in the method of PPP.
o An island-wide network of new ‘technical university colleges’ will be established.
• Implement a range of Public-Private Partnership (PPP) Projects to enhance the health sector:
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o The National Hospital of Sri Lanka upgraded to an international standard where cardiology services, emergency and complex treatment and operations delivered to patients.
o One selected hospital in every district will be fully-equipped and upgraded to a level similar to that of the National Hospital at present, in terms of medical treatment, surgical theatres and laboratory facilities.
• They pledge to construct an international standard sports stadium’s (Indoor and Outdoor) in every province of Sri Lanka to facilitate international athletic events.
• Implement a range of Public-Private Partnership (PPP) Projects to enhance Housing sector:
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o A multi-storey housing complex scheme introduced under a Public-Private-Partnership (PPP) for those who require temporary accommodation at a reasonable rent.
o Special housing projects under public-private partnership agreements will be implemented islandwide to enable young couples to purchase a house from an urban area on long-term easy payment plans.
o New multi-storey housing complexes will be built island-wide to replace old blocks of flats that are beyond repair.
• A tax-free package will be introduced to promote investment in identified economic corridors.
• Implement a range of Public-Private Partnership (PPP) Projects to enhance Transport sector:
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o New secure railway coaches will be introduced to expand the role of the railways in goods transport
o Develop a Metro Rail system to link the satellite cities in the Colombo district including the Port City.
o Rail lines will be converted into electric train routes and thereby ensure the public provided with a luxury transport service similar to that planned for the buses.
o Doubling the TEU capacity of Colombo Port to facilitate significant transhipment business volumes
o Develop Hambantota port as an International, Industrial and Services Port, and establish facilities for local businesses to provide services such as Ship maintenance and repair, ship handling
o Develop all other domestic airports and passenger terminals enabling internal transportation, tourism and movement of people
• Expression of Interests (EOIs) called for new hotel projects in the Eastern and Southern province as the number of hotel rooms currently available will have to be doubled. Incentives will also be provided to set up high-quality tourist hotels.
• EOIs called for investors to invest in New Export Processing Zones: They plan to allocate 200 acres of land belonging to the Commission in Eravur area (Northern Province) for the development of export-related apparel zones.
• Calling for international suppliers to participate in tenders to implement:
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o A single transport e-ticket system (i.e. multi-modal ticket, day tickets etc.) and a process introduced, and e-ticketing mechanism implemented for all public and private transport services.
o Digital and electronic payment system will be introduced for citizens to pay traffic fines with ease and without any hassle.
o E-health and Telemedicine for patients to obtain diagnoses and treatment conveniently and to prevent crowding at hospitals.
o High-Speed Optical Transmission System and a high speed 5G Mobile Broadband System to facilitate data transmission
o Mobile and digital payment system along with the necessary physical infrastructure and legal provisions to handle all local and international financial transactions
• Inter-City related improvement projects:
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o Colombo beautification project would be undertaken by introducing beautiful urban forests, water gardens, and green belts on either side of the highways, thereby eliminating the visible concrete facades.
o Tech Cities with digital monitoring and administrative centres will be established to address water and electricity usage, traffic congestion, and disaster situations
• Tenders will be called to develop new and modernise the existing road network:
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o Colombo-Kandy Expressway and the Port city elevated highway project will be extended and finished without further delays.
o The Northern and Ratnapura expressway highway completed, while feasibility studies will be conducted to explore the possibility of having an elevated road at 1000 feet connecting Kandy to Nuwara Eliya.
o Further, develop 100,000 KM alternative road system to facilitate a higher level of access to main roads and expressways.
• Tenders will be called to facilitate the transition of 80% Renewable energy in 2040:
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o 230 MW of power to the national grid by installing the Broadland hydropower station by 2020, Uma Oya by 2021, Moragolla by 2023, Talapitigala and Seethwaka by 2024.
o Conversion of the Kelanitissa plant to a natural gas turbine plant, where similar two plants in Kerawalapitiya and Hambantota before 2023
o Develop a Smart Grid to ensure maximum efficiency and utilisation obtained from all power plants.
o Add 100MW of wind energy in Mannar by 2021. Additionally, we expect to add 800MW of solar energy to the national grid by executing a wind and solar power project with a public-private partnership in potential locations around the country including Mannar, Poonareyn and Monaragala
o Rooftop solar systems will be encouraged so that households and small businesses would have access to low-cost energy.
OSL Take:
Sri Lanka enjoys active trade and bilateral ties with countries in the South Asian region. Sri Lanka also enjoys free trade agreements with India and Pakistan while enjoying preferential treatment in trade with other South Asian countries. Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country and the many trade agreements, as well as trade concessions enjoyed by the state, have made it an attractive business destination in the South Asian region. Foreign businesses/investors looking at doing business in the South Asian area could explore setting up base in Sri Lanka to engage with other South Asian countries.
Investors interested in finding out more information about these upcoming projects should contact Opportunity Sri Lanka, at the following email address, telephone, or web inquiry.
| Article Code : | VBS/AT/09122019/Z_T1 |