Sri Lankans government asks private investors to develop key Colombo railway stations under PPP
Daily FT: The Government has called for expressions of interest (EOIs) from private investors to develop six major railway stations in and around Colombo, including Kollupitiya, Bambalapitiya, Wellawatte, Kompanyaweediya, Dehiwala and Mount Lavinia.
“The move is part of a broader initiative to upgrade these stations through a public-private partnership (PPP) model,” Cabinet Spokesman and Transport Minister Bandula Gunawardana said at the weekly post-Cabinet media briefing recently.
He said under the PPP model, property belonging to the Railways Department will be leased on a long-term basis to private investors, who will be responsible for transforming the stations into modern “station plazas.”
These plazas are expected to enhance the infrastructure and amenities at the stations while generating revenue for the Government.
Gunawardana highlighted that the concept has already gained traction, with several EOIs submitted for the development of railway stations countrywide. One notable example is the Ella station, a popular tourist destination, which is being developed by Laksala, a state-owned enterprise.
“The Ella station has been beautifully redeveloped, and the Government benefits not only from land rent but also receives 5% of the turnover,” Gunawardana said, describing the profitability and viability of the station plaza business model.
He said the initiative is part of a broader effort to modernise the railway system and unlock the commercial potential of railway properties, improving services for commuters while creating new revenue streams for the Government.
OSL take:
Sri Lanka’s development agenda has opened up many new business/investment opportunities. The overall economic expansion of the country and its path towards becoming a hub in the South Asian region, have resulted in the need for the development of infrastructure and supplementary infrastructure facilities to meet the requirements of the growing demand. In the country’s development programme, improving connectivity internally and externally as well as providing the necessary supplementary infrastructure facilities have presented a business/investment opportunity for foreign businesses exploring possibilities of being part of public-private partnerships. These development porgrammes could be looked at as a revolving income generator if carried out under a proper business model. Sri Lanka’s overall economic expansion and the future growth potential will create further business/investment opportunities in the country’s development programme. Foreign businesses/investors while exploring these opportunities could also look at forming collaborations with local businesses in order to engage in these development programmes.