Opportunity - Project to upgrade 100,000 km roads by the Ministry of Highways and Road Development

Cabinet of Ministers accepted the Roads and Highways Minister Johnston Fernando's plan to build an alternate road system of 100,000 km in length to provide easy access for highways and expressways. Roads that have not repaired for nearly ten years will choose after taking into account the road value and the number of families using the way.

Sri Lanka has an approximately 120,000-kilometer road network sufficient to meet 90% of transportation demand. The Road Development Authority (RDA) is responsible for the maintenance and development of national roads of the A and B classes and 4,480 bridges over the total length of highways. The regional councils were responsible for about another 15,000 kilometres of C and D-class highways. Local governments and other government and private institutions maintain and develop the balance.  

The newly elected government aims to upgrade 100,000 KM alternative road system to facilitate a higher level of access to main roads and expressways, while all internal and rural access roads will be improved to facilitate access to the alternative road system.

The island-wide network of roads amounting to 120,000 KM, which includes all rural roads, has neither been developed nor maintained. Therefore, the entire road network that has fallen into a state of disrepair and neglect will be resurfaced and modernised to conform to international standards.

They will modernise the Ceylon Transport Board (CTB) and make it a world-class transport service on par with any other developed country. The bus stands, which located on prime land, will be developed alongside servicing and maintenance depots of such bus routes and networks for commercial purposes of generating revenue to the CTB.

They also intend to re-fleet the current bus stock and introduce environmentally friendly buses (electric and hybrid buses) to ply within the city limits of the New Colombo. This ‘Green Transport’ concept will adopt across all public and private transport providers.

OSL Take: The 100,000km road upgrading tender proposed by the Ministry of Road & Highways is indicative of the continuous growth of Sri Lanka’s economy. It is also indicative of the growing business potential in the country.

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 Sri Lanka the ideal business destination in the South Asian region. Therefore foreign businesses/investors could confidently explore business/investment opportunities in Sri Lanka.

 OSL, as the pro-active FDI generator to the island, now calls upon Chinese investors to partner with OSL to bid for Road network-related Projects open for investment through the PPP model. Have a free consultation with the biz-friendly OSL Team today to learn more about the scope available and the way to move forward.

VBS/AT/20200313/Z_TB5 

Opportunity - Cabinet approves for LKR 600Mn new road to BIA

Sri Lanka will construct a 600 million rupee second approach road to Katunayake's main international airport, said Minister Ramesh Pathirana, a spokesman for the cabinet. At the airport, he said there had been congestion at peak hours. The cost of the second route of access projected at LKR 600Mn.

The road will stretch from Minuwangoda and Katunayake Industrial Zone Investment Board district. The state airport agency Sri Lanka Airport and Aviation Services will provide funds.

Sri Lanka has an approximately 120,000-kilometer road network sufficient to meet 90% of transportation demand. The Road Development Authority (RDA) is responsible for the maintenance and development of national roads of the A and B classes and 4,480 bridges over the total length of highways. The regional councils were responsible for about another 15,000 kilometres of C and D-class highways. Local governments and other government and private institutions maintain and develop the balance.  

Colombo-Kandy Expressway and the Port city elevated highway project will be extended and finished without further delays. The network will also connect Kottawa, Battaramulla, and Peliyagoda. The Northern and Ratnapura expressway will even complete, while feasibility studies will conduct to explore the possibility of having an elevated highway at 1000 feet connecting Kandy to Nuwara Eliya.

Further, a single transport e-ticket system (i.e. multi-modal ticket, day tickets, etc.) and a process will introduce, and an e-ticketing mechanism would implement for all public and private transport services.

The railway will also use to transport goods since it will help to minimise the traffic situation aggravated by container transportation via roads. They will provide assistance to import required locomotives and will establish a method to build trailers locally, that needed for cargo transportation. They will expand facilities needed to transport cargo via trains to Colombo, Hambantota, Trincomalee, and Kankasanthurai ports.

They will develop all key train stations, converting them into a functional, recreational, meeting, greeting and eating places, with malls and shops needed to provide consumers with a total travel experience

OSL Take: OSL as the pro-active FDI generator to the island, now calls upon Chinese investors to partner with OSL to bid for Road network-related Projects open for investment through the PPP model. Have a free consultation with the biz-friendly OSL Team today to learn more about the scope available and the way to move forward.

VBS/AT/20200313/Z_TB4 

Opportunity - Bids are now called from prospective investors to export graphite as value-added products

Ministerial cabinet approved the proposal put forward by Minister of Industry and Logistics Management Wimal Weerawansa to call for competitive bids to find an investor to export graphite from the state-owned Kahatagaha mine as value-added products.

The Kahatagaha graphite mine mines about 65 to 70 tonnes of graphite per year and exports the entire output in raw form. Sri Lanka provides just 7 per cent of the international market demand for graphite.

The Sri Lankan Institute of Nano Technology, a research institute for public-private collaborations, has made progress in producing graphene, a high-value commodity produced from oxidising graphite. Kahatagaha Graphite, a state-run Sri Lankan, has been given the clearance to pursue an investor to add value to growth, the state information office said.

Ministers' cabinet had endorsed the idea that prospective investors would pursue expressions of interest.

In February 2019, a resource update put resources at 53.08 million tonnes of inferred resources, ranking 6.67% of total heavy minerals. With the upgrade, Titanium Sands introduced a new high-grade area with 9.85 million tonnes of full heavy metals at 9.06 per cent. Titanium Sands is also hoping with new tenements to expand Mannar's resources and is evaluating a proposed acquisition within an extended period.

Sri Lanka's graphite industry reaches far back in history to the point where it is an integral part of local folk culture. According to historical records, during World War 1 and World War II, about 35,000 metric tonnes of natural graphite were shipped per year.

While the industry has been alive and thriving for over two centuries, few know that Sri Lanka boasts the world's purest form of graphite, vein graphite (> 95 per cent). These graphite veins range from veinlets less than 1 mm thick to massive threads greater than 1 m thick.

OSL Take: Sri Lanka is the only place in the world where commercial quantities of venous graphite made. The nation is now looking to dust off the ashes and make its mark on the global economy and the market with the end of a thirty-decade civil war. The government considered graphite one of the leading mineral products in this endeavour, which has the potential to create significant private-sector foreign investments.

 The expansion of the Sri Lankan mining sector shows the varying scope of business/investment opportunities on the island and their success. The state-owned enterprise selling Zircon and mineral sands is also a clear indication of the many raw materials available for sale in Sri Lanka. Besides mineral sands, there is also a big phosphate deposit in the nation. Foreign mineral businesses could approach the government of Sri Lanka and explore company possibilities in conducting mineral-related operations.

VBS/AT/20200313/Z_TB3

Mini-hydro projects to gain immensely from the new fixed tariff

Mini-hydro developer profitability in Sri Lanka will increase amid environmental risks due to a new tariff structure that approved in January, a rating agency ICRA Lanka said. Power and energy minister Mahinda Amaraweera had called for the implementation of a fixed rate for renewable energy supply in January 2020.

Until 2008, the State-owned power provider and regulator, the Ceylon Electricity Board (CEB), had signed Power Purchase Agreements (PPAs) on the avoided cost principle, charging the CEB's equal unit generation cost to private producers.

Nevertheless, this system seen as disadvantageous to the state as the CEB had significant inefficiencies, ICRA said. A three-tier tariff system was implemented in 2008 but was reformed once again with the implementation of competitive bidding in 2016.

Mini-hydros initially considered to be exempt from bidding because of the difficulty of power plant building, but that decision not finalised, ICRA said. Moreover, ICRA said the extension of PPAs at a fixed rate effective from January 2019 would improve profitability.

Most of the avoided costs had expired from 15-20 years of PPAs signed before 2008, generating power at a nominal rate, but extending the new rates back to January 2019 would boost profits, ICRA said. CEB had proposed an earlier review of the PPAs, but the move postponed.

Mini-hydro plants produce about 6-8 per cent of energy from Sri Lanka. Profits, however, fluctuate because of environmental threats. Mini-hydro companies had a favourable fourth quarter due to rain in 2019, but given the uncertainty in the country's weather conditions, the ability to operate power plants at an optimal level reduced, ICRA said.

With the revival of economic growth, the rating agency also said power demand would grow by 5-6 per cent over the next two years, increasing demand for private power producers. Furthermore, for the few remaining old-style costs avoided PPAs, income will grow for the next two years due to rising costs of thermal power generation at the back of tensions between the US and Iran, ICRA said.

The positive developments for mini-hydro developers, however, are being shadowed by overdue CEB payments, ICRA said. According to the Minister, CEB made 85 billion loss rupees for 2019 and expected to face more losses of 120 billion rupees by 2020. Sri Lanka obtained high thermal power on an emergency basis since the state had not commissioned new power plants since 2014.

OSL Take: The development program carried out by the government of Sri Lanka, covering all critical economic sectors islandwide, has resulted in the expansion of business/investment opportunities in the country. However, the most significant number of business/investment opportunities have come forward in Sri Lanka’s power and energy sector.

Opportunities in the power industry include wind and solar power plants, LNG power plants, auto-diesel power plants (liquid natural gas) plants, mini-hydropower plants, domestic solar systems, wind power, and power wires.

 VBS/AT/20200313/Z_TB2

Innovation and Technology will propel Sri Lanka's economic growth World Bank

The World Bank Vice President for the South Asia Region - Hartwig Schafer completed a four-day visit; the World Bank reaffirmed its continued support for Sri Lanka's growth and development to the benefit of all its citizens. In the course of his appointment, Schafer gained a better understanding of the development goals of the country under the new government and how the financial and technical tools of the World Bank can use for maximum impact.

Schafer congratulated President Gotabaya Rajapakse on his recent victory in elections and promised continued support from the World Bank to realise Sri Lanka's ambitions for growth and development. He also met with Sri Lankan prime minister and finance minister Mahinda Rajapakse and senior government officials including the newly appointed central bank governor Prof. W.D. Lakshman and finance ministry secretary Sajith Attygalle.

Throughout his visit, Schafer addressed some of the main goals of the government, such as investing in human and physical resources, reforming the public sector, creating skilled jobs for young people and responding to the health needs of a rapidly ageing population. He also commended the Government's focus on tourism as a sustained growth driver. It also addressed fostering creativity in agriculture to respond to climate change while developing value-added systems to encourage growth.

Schafer travelled to Kegalle district to visit a rural water treatment plant sponsored by the World Bank, which is the only such project in Sri Lanka that provides the rural communities with treated piped water. In exchange for improved and reliable water supplies, he worked with beneficiary groups that had agreed to pay some of the infrastructure costs.

Schafer also visited the Kandy Multimodal Transport Terminal (KMTT) potential site to learn how the facility would improve safety and reduce congestion. The portfolio of the robust International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD) includes 18 projects in Sri Lanka (with a cumulative net investment of approximately US$ 2 billion).

OSL Take: The World Bank Vice President for the South Asia Region is visiting Sri Lanka to gain further knowledge on the country’s development agenda. The Bank and its subsidiaries have already pumped in large amounts of monies for development projects covering several vital economic sectors. Further improving the discussion between the World Bank and the Sri Lankan government would result in a further increase in development assistance to the island nation. Sri Lanka’s relationship with the World Bank is an encouraging sign for foreign businesses/investors keen on doing business with Sri Lanka since the interest shown by multinational lending agencies would help secure funding for large scale projects.

VBS/AT/20200313/Z_TB1

Sri Lankan East Terminal to commence commercial operations in three months

The Government of Sri Lanka will make the Colombo Port East Terminal operational within three months, a senior official said. "The business community can have hope within the next three months," said Daya Ratnayake, Chairman of the Sri Lanka Ports Authority.

In his election manifesto, placing out his plans for the years 2020-2025 president Gotabaya Rajapaksa made the East Container Terminal development a priority. The regime has said it plans to double the capacity at Colombo Port for container handling.

"We can develop the Western Terminal which we are going to focus on next," Ratnayake said. Policy paper 2020-2025 said Sri Lanka would attract private investment into a planned West container terminal and study the feasibility of a cross-berth terminal between two existing terminals. "Later, we'll explore the ports cruise business," Ratnayake said. "For Sri Lanka, this is a gold mine that has not exploited to its full capacity," he added.

Construction of the terminal with private investors ditched under the last administration, despite the top global shipping lines expressing interest. "Other constructions stopped after the Eastern Terminal completed, and as a result, we lost huge revenue that no one had estimated," Ratnayake said.

With all the inconveniences, the chairman said the ports last year generated 51 billion rupees in revenue. "Because of discrepancy, guidelines or a proper plan, we're not being competitive or achieving our potential," he said.

Colombo International Container Terminals (CICT), a Chinese-controlled terminal, said its volumes had risen 322 percent in the last five years, from 686,639 TEUs handled in its first year in 2014. CICT treated 2.9 million containers at the Port of Colombo in Sri Lanka in 2019.

OSL Take: The newly elected government aims to develop Colombo-Katunayake and Hambantota Mattala air and seaports as commercial and passenger ports. They will also convert these locations into free ports to encourage local entrepreneurs and overseas channel investments into these areas. Foreign investors could explore investment opportunities in the following areas:

The government of Sri Lanka focused on making the country a maritime hub in the Indian Ocean region. The latest achievements of the Colombo and Hambantota Ports indicates that the country is closing in on achieving the target. The port already has an industrial zone on the premises, which provides an ideal business space for companies engaged in exports and logistics.

All these developments would help Sri Lanka engage in trade activities with other countries. On the other hand, Sri Lanka could attract more cruise liners to the state by developing other harbors around the country and developing the required infrastructure facilities. Foreign businesses/investors should explore the increasing investment opportunities in Sri Lanka's ports and shipping sector.

VBS/AT/20200311/Z_TB4 

Sri Lanka’s Silvermill in Indonesia expands with US$5mn ADB loan

The Asian Development Bank, centered in Manila, said it would lend US$ 5 million to Sri Lanka's Silvermill Group's PTSASL and Sons Indonesia (PTSASL) to expand its coconut processing operations. The loan would help Silvermill set up a modern processing plant for export value-added coconut goods, profiting 9,500 smallholder coconut farmers, and creating more than 1,200 jobs in Sulawesi Island's Central Province.

"As the world's second-largest coconut producer, Indonesia's coconut industry has huge potential to become the economy's high-performance, high-value-adding market," said Carine Donges, ADB Agribusiness Investment Specialist.

"The expansion of Silvermill into Indonesia will allow the group to tap into a much larger coconut resource supply, while directly improving the livelihoods of thousands of rural households in Central Sulawesi."

Silvermill is one of the biggest coconut processing and estate management firms in Sri Lanka, exporting finished products for food and beverage as well as for industrial applications. In 2017 the Indonesian subsidiary was formed.

In 2017, Sri Lanka faced deterioration in coconut and its manufacture of processed products due to the worst scarcity in 40 years which led to an increase in nut prices. The South Asian economy is among the most vulnerable to climate hazards in the world.

"This facility will allow Silvermill to continue our multi-sourcing strategy to mitigate climate risks to better serve our customers while enhancing the coconut community and working to improve coconut agriculturalists not only in Sri Lanka nonetheless also in Central Sulawesi," said Silvermill Group CEO Suresh Silva.

"We further believe that the collaborations between Silvermill and ADB, and our mutual values, will help make a significant difference in empowering and inspiring the communities around us." The new processing plant will supply over 100 million coconuts annually at full operational capacity. It will provide local coconut farmers with a steady source of income at a premium as opposed to the conventional take-off from copra manufacturers — the dried coconut kernel.

The new plant is expected to generate more than 9,400 metric tonnes of desiccated coconut per year — a high-nutrition dried and shredded coconut kernel mainly used for cooking and baking — and has an annual capacity to produce more than 2,500 metric tonnes of virgin coconut oil.

PTSASL is wholly owned by Silvermill, which since its establishment in 1920, has been supplying high-value coconut-based products globally for nearly 100 years. Its range currently includes over 60 products.

OSL Take: The expansion by one Sri Lankan company of a business unit of another local company indicates the strength of local businesses. It is also an indication of the overall growth of the country’s economy. Therefore, foreign companies could look at forming joint ventures with local companies to expand their business ventures in the South Asian region. The latest acquisition of a local entity is yet another indication of the strength and growth of the country’s private sector.

VBS/AT/20200311/Z_TB3 

Sri Lanka’s most extensive construction roadshow to kick off in March

The leading Construction Expo in Sri Lanka, bringing together local and international suppliers and service organizations in the construction, building, engineering and architecture sectors, will be held at BMICH from March 20 to 22. Organized and operated for the 8th consecutive year by Lanka Exhibition and Conference Services (Pvt) Ltd, in partnership with the Ceylon Institute of Builders (CIOB), the organizers hope that this will be the forum where the industry's future development will take place.

Construction Expo 2020 will be the center for all major players locally and internationally, under the theme "Towards a green Lanka." It will provide a universal platform for all construction-related industries and provide participants an opportunity to display their goods & services covering all industry-related spheres. Exploring the potential in the construction industry in the South Asia region will be the meeting place for domestic and international products & technology suppliers.

Construction Expo 2020 is the perfect platform for designers, architects, vendors, and consumers to meet in an atmosphere in which success guaranteed for everyone. It is the venue where the design of the building and the demand of customers collide in a blissful symphony that will produce positive results. Additionally, the following roofing systems will provide by service providers.

With the inclusion of finance & banking experts, these suppliers will increase. International vendors will join the show and enrich the production. Morocco Air Technologies (Pvt) Ltd and KDI International (INGCO) are sponsors of the event.

J-Lanka Technologies (Pvt) Ltd is the Silver Sponsor of the event, while Lex Duco (Pvt) Ltd (MODELCO) is the Tool Partner of Outside Edge Solutions (Pvt) Construction. The Print media affiliate is Ceylon Limited Associated Newspapers. Multi Creative Solutions is the Digital Media Partner while Popular Pacific Shipping Lanka (Pvt) Ltd is the logistic partner.

OSL Take: Construction expo is the center for all major players at the local and international levels. It will provide an interactive platform for all construction-related industries and allow participants to display their products & services covering all industry-related spheres. Exploring the potential in the construction industry in the South Asian region will be the meeting point for the domestic and international materials & technology suppliers.

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 a 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.

Sri Lanka’s demand for building and construction in the country’s commercial capital, Colombo, and its suburbs have seen a radical increase due to the migration of individuals to the area. The ongoing development program and the country’s economic policies have made it an attractive business destination in the South Asian region. Foreign companies could, therefore, explore business/investment opportunities in Sri Lanka’s housing as well as other key sectors as well.

VBS/AT/20200311/Z_TB2

Sri Lanka talks with the US on Indo-Pacific strategy

The Ministry of Foreign Affairs said the visit of US Assistant Secretary of State Alice Wells and Sri Lankan Foreign Minister Dinesh Gunawardena had discussions on economics, defence, maritime affairs and the US Indo Pacific Strategy.

"While articulating the region's US strategic vision, Ambassador Wells conveyed the United States ' keen desire to build a stronger rapport with Sri Lanka and highlighted the importance that the US places on bilateral engagement," the statement said.

Wells had previously said that the two countries planned to re-negotiate the Millennium Challenge Corporation's $500 million awards, which caught in cross-fire during a recent presidential election.

Minister Gunawardena highlighted the need for greater market access for Sri Lankan products and more significant investment in Sri Lanka while appreciating the US grant assistance, "the foreign ministry said.

"It has been agreed that the two sides are working together to increase foreign direct investment between the US and Sri Lanka. Also, the US delegation was briefed on developments in Sri Lanka and the renewed efforts in reconciliation and development."

Data from the Department of Commerce of Sri Lanka indicates that bilateral trade between the two countries from 2012 to 2016 increased by 43% from USD 2.34 billion to USD 3.34 billion and 2016’s year-on-year bilateral trade with the US increased by 2.14% to USD 3.34 billion from 2015’s USD 3.27 billion.

The US attributed to 27.5% of Sri Lanka’s 2016 total exports and US imports to Sri Lanka for the same year accounted for 2.77% of the country’s total imports from around the world. Data from the Department of Commerce of Sri Lanka indicates that of 2016’s bilateral trade activities, US imports to Sri Lanka were 16% amounting to USD 540 million, with Sri Lankan exports to the US making up 84% amounting to USD 2.8 billion.

Sri Lanka’s exports to the US surged by 33% from $ 2.11 billion in 2012 to $ 2.8 billion in 2016. In the same period, imports from the US to Sri Lanka rose by 130% to $ 540 million. Sri Lanka’s leading exports to the US in 2016 were apparel, clothing accessories and made up textile articles (all three totalling 11.5% of overall exports), reliable, new and used tires (6%), followed by fish, activated carbon and mineral, and cinnamon. Among the leading imports from the US in 2016 were oil cakes (13%), optical and photographic (10%), plastics (5%), medicaments (3%) and wheat and meslin (3%), etc.

OSL Take: Continuing trade relations between the US and Sri Lanka is a positive as the US being a consumer-driven will continue to demand imports from Sri Lanka which is an export-reliant nation. The USD 480 MCC Compact is a grant instead of a loan borrowed at a fixed/floating interest rate.

Further, it places no economical strain on the state or taxpayers of Sri Lanka as such. The MCC grant is a powerful sign of Sri Lanka's strong bilateral relations with the US. The US continues to be Sri Lanka's growth partner and has also expanded to the island nation the US GSP trade concession.

Furthermore, US firms/investors could confidently explore possibilities in Sri Lanka and look to form joint ventures with local firms due to the close links between the two nations. Earlier this year, the MCC CEO- Sean Cairncross, has pledged that the U.S. government agency is committed to implementing the U.S. $480 million grant to mitigate transportation and land management problems influencing the country's economy.

VBS/AT/20200311/Z_TB1

Sri Lanka’s CEB requires investments of US$1.7bn till 2022

Sri Lanka's Ceylon Electricity Board needs investments of $1.7 billion by 2022, and the company not expected to hike rates amid losses, Fitch Ratings said after similar action on the sovereign credit rating, cutting its outlook negative.

"The Outlook revision follows Sri Lanka's' B' Long-Term Foreign-Currency Issuer Default Rating (IDR) to Negative from Stable over the Outlook revision," Fitch said. "The CEB rating, which is entirely state-owned, is equalized with that of the sovereign of Sri Lanka to represent clear linkages in line with the requirements of Fitch's Parent and Subsidiary Rating Linkage."

CEB earnings expected to remain weak due to subsidized tariffs and the rising cost of generation, while cash flows will be negative due to aggressive expansion plans, accounting for a 6 percent increase in demand for electricity by 2025, Fitch said. CEB, which charged with improving the country's power infrastructure, will bear the bulk expenditures, estimated by management at about USD 1.7 billion over 2019-2022, Fitch said.

To keep the state enterprise afloat, the government provides CEB explicit guarantees, equity infusions, and debt. Fitch said the credit profile of the CEB would be much lower if the state did not back it up. Fitch revised the Outlook on the National Long-Term Rating to Positive from Stable by Ceylon Electricity Board (CEB) and affirmed the rating at 'AA+ (lka).'

The Outlook revision follows the Outlook revision to Stable Negative on Sri Lanka's ' B ' Long-Term Foreign-Currency Issuer Default Rating (IDR); see fitchratings.com/site/pr/10105494 for information.

In position with Fitch's Parent and Subsidiary Rating Linkage criteria, the CEB rating, which is wholly state-owned, is levelled with that of the Sri Lankan sovereign to reflect strong linkages. The equalization takes into account the strategic importance that CEB places on Sri Lanka in maintaining power security and providing affordable energy to the public. The vital importance of the CEB for the state stems from its role as the sole grid operator and distributor of the nation and the producer of 80 percent of Sri Lankan electricity.

Fitch believes that the Government of Sri Lanka is using CEB as a mechanism to provide an essential public service. CEB sells electricity at subsidized rates, without appropriate and prompt government financial reimbursement.

We do not anticipate that the relations between CEB and its parent would collapse in the medium term, as the supply of electricity at subsidized rates can only be carried out by a government entity such as CEB, as private businesses would not be willing to bear the loss. Low Standalone Credit Profile: Fitch assesses CEB's Standalone Credit Profile as much weaker than its support-driven ranking, and believes it is difficult to provide a notch-specific standalone CEB credit view due to poor visibility of the margin and the need for continued state support to maintain operations.

CEB continues to make operating losses because tariffs are lower than its average cost of manufacturing, selling, and transmitting –which compels the company to borrow to support its daily business. Significant investments in new generation infrastructure and network upgrades, which are funded primarily by borrowing, further strain the balance sheet.

OSL Take: The looming power crisis in Sri Lanka has resulted in the opening up of many business/investment opportunities in the country’s power and energy sector. The government of Sri Lanka is continuously exploring solutions to address the rapidly increasing demand for electricity. The government is also focusing on sustainable energy generation methods.

VBS/AT/20200306/Z_TB9

Sri Lanka Tourism promoted at CMT 2020, Germany

Sri Lanka has been able to create a positive image in the minds of those visiting the Sri Lankan stall at CMT 2020, Germany's largest consumer fair, the Sri Lankan Tourism Promotion Bureau (SLTPB) said. CMT 2020, which took place at the Landesmesse in Stuttgart from 11 to 19 January 2020, was described as the industry's best international platform for holding B2C meetings with prospective German travellers and also more ads for their respective businesses.

India, Thailand, Malaysia, Indonesia, and the Dominican Republic were among those countries that attended CMT 2020. CMT expects an average fall of about 260,000 feet, and out of 36,000 trade visitors (B2B) and 224,000 visitors are B2C visitors. Sri Lanka representation at CMT is essential as it addresses end customers, whereas ITB focused on trade.

SLTPB was greatly assisted by the Embassy of Sri Lanka in Berlin and the Consulate of Sri Lanka in Frankfurt to coordinate this event successfully. Karunasena Hettiarachchi, Ambassador of Sri Lanka to Germany and Ms. Madurika Weninger, Consul General of the Sri Lankan Consulate in Frankfurt officially inaugurated the Sri Lankan stand at the event. Sri Lankan Consul General also attended the event in Stuttgart and Radolfzell.

At the Sri Lankan stand, B2C sessions held where travel-oriented visitors could discuss their travel plans with their representatives from the Sri Lankan industry. The most highlighted items that attracted tourists were the Tea Bar serving the famous Ceylon Tea, the food degustation counter offering visitors the opportunity to sample Sri Lankan cuisine, the cultural performances shown at the Sri Lankan stand, the photo booth and the quiz contest.

Sri Lanka has been allowed to perform in front of a massive audience at the Atrium stage, depict its educational success and promote the brand "So Sri Lanka" on the stage's mega-back drop banner. Sri Lanka also conducted a separate campaign to help Sri Lanka among visitors by placing Sri Lanka Tourism branding on mega-banners at the main entrances to the fair as well as at the entrance gates to Hall No. 08 where Sri Lanka Stall is situated.

OSL Take: Sri Lanka’s tourism industry is on a continuous growth path with tourist arrivals to the country also on the increase. Sri Lanka continues to list as a must-visit destination by globally renowned travel publications. All this has stemmed to a rise in foreign investments in the country’s tourism industry. The continuous growth in Sri Lanka’s tourism industry has further expanded the business potential in the country’s leisure and hospitality sectors.

Given the continuous growth recorded by Sri Lanka’s tourism industry and the potential for further growth in the industry, the country’s tourism authorities are keen on looking at methods to formulate a target-orientated plan.

Once the plan is in place, the corporate/investment opportunities in Sri Lanka’s tourism industry would further expand. Therefore Sri Lanka’s tourism industry would become a hotspot for business opportunities. Sri Lanka continues to list as a must-visit destination by globally renowned travel publications.

VBS/AT/20200306/Z_TB8

Sri Lanka and China’s Belt and Road Initiative (BRI) Opportunities

In spite of being aware of Belt and Road Initiative (BRI) ventures, the private sector in Sri Lanka needs stronger policy support to exploit opportunities and practical assistance to work with Chinese companies, an official said yesterday.

Speaking at a discussion on the BRI, Ceylon Chamber of Commerce Chief Economist Shiran Fernando noted that a survey conducted among members had shown that while 51 percent of those who responded had a reasonable idea of the BRI and its ties to Sri Lanka and 10 percent had an advanced understanding, many struggled to relate their businesses to well-known projects.

"Sri Lanka received the second-highest level of BRI-related funding from China between 2000 and 2017, after Pakistan. The private sector has described the Colombo International Financial City (CIFC) or Port City, the Port of Hambantota and, to a lesser extent, the industrial zone of Hambantota as having the most useful for their business interests. We were, however, less aware of how to respond to most of these opportunities," Fernando said.

The survey showed that most businesses (28 percent) wanted the government to encourage the participation of private sector companies in projects. Many others wanted support to start businesses in the Port City, while 24 percent wanted support from government to joint ventures between Chinese and local companies. A smaller 16 percent wanted support to encourage collaboration in technology and 10 percent wanted support to do business in the industrial zone of Hambantota.

"The private sector also wanted legislation to facilitate joint ventures or public-private partnerships, facilitate business arbitration that would involve not only China but also other republics, open up land for investors and support advanced levels of technical skills for service delivery such as logistics. The recommendations included investing in improving the capabilities of the local labor force, reducing barriers to setting up businesses for investors, introducing laws to facilitate Public-Private Partnerships (PPPs), Build Own Transfer (BOT) and arbitration.

Survey respondents have identified many obstacles including geopolitical effects, local business fears about trade liberalization, and anti-globalization sentiment patterns. "Sri Lanka stands to gain from joining the BRI. However, Sri Lanka's BRI activities attracted both good and bad news. As regards foreign policy, the Sri Lankan President has categorically said that India will be our number one concern for strategic security for all practical purposes.

He has also said that Sri Lanka wants to be a neutral country and to maintain friendly nations with all. Sri Lanka does not want to get entangled in engagement in the Indian Ocean region between the world's superpowers. Besides, Sri Lanka must retain ownership of all of its national assets, "Admiral Professor Jayanath Colombage, Additional Secretary to the President (Foreign Relations), told the meeting.

OSL Take:  The Belt and Road Initiative expected to possibly become the most significant infrastructure project ever involving 68 countries around the world resurrecting the old “Silk Road” that used to link Europe and Asia.

The objective of the initiative is to make economic and trade activities along the route dynamic and vigorous once again establishing it as the world’s most dominant trading area. The Belt and Road Initiative will complement the government of Sri Lanka’s aim of establishing Sri Lanka as a global hub and also open avenues for innumerable opportunities.

 VBS/AT/20200306/Z_TB7

World’s top Investment Bank – Citigroup invests in Sri Lankan Company

Global Markets Limited of the Citi Group acquired a 22.6 billion rupee stake in John Keells Holdings Plc from Malaysia's Khazanah Nasional Berhad sovereign wealth fund Thursday, market sources said. Sources said Citi Group had bought the stock on behalf of a long-term multinational institutional investor. CT CLSA was brokering the deal, a market filing said.

The 141.9 million shares, totaling 10.8 percent, had been purchased at 160 rupees, 1.10 rupees below the first level, and the percentage of John Keells Holdings (JKH) shot up to 164 rupees after the trade. Khazanah had invested in JKH through the Broga Hill Investments Limited investment vehicle and held the second-largest stake behind 11.4 percent for Sohli Captain.

Thursday's selling follows a Wednesday market correction after a 7-month boom when Colombo's stocks fell 2.64 percent. On Wednesday, the JKH share fell 1.80 rupees to 161.10. The share had risen by mid-May, at the tail end of the retreat following the Easter Sunday bombings, from 135 rupees a share.

JKH is the biggest listed company in Sri Lanka. The business is well-diversified, with the most extensive travel and hospitality, properties, logistics, banking, information technology, food and beverage, and retail operations.

In 2012, Khazanah had joined JKH, buying an 8.8 percent stake, or 74.5 million shares, for 14.5 billion rupees at 194 rupees. Most of the stocks purchased from the State-managed pension fund, the Provident Fund for Employees, in 2012.

Market sources said the JKH share had peaked at 298.60 rupees since the Khazanah investment on May 20, 2012, ahead of rights and warrants issues which followed to finance the group's flagship mixed development property Cinnamon Life.

After the re-election of Mahathir Mohamed as Malaysia's premier in 2018, Khazanah restructured its portfolios under a new strategy launched in 2019. Khazanah sold the foreign investment to offer cash to the government to help minimize a fiscal deficit and stabilize the state investment fund scandals 1Malaysia Development Berhad, reported by international media.

OSL Take: The news that the world’s largest Investment Bank - Citigroup had increased its equity investments in Sri Lanka in 2019 is indicative of the development and growth of the Sri Lankan economy. This news should add to the confidence of foreign businesses/investors to explore business/investment opportunities in Sri Lanka.

The investment in Sri Lanka by one of the USA’s largest investment banks in the world will increase Private Equity FDI to Sri Lanka and further would boost investor confidence in the Asian Pacific region. The island continues to maintain its name in the top ten destinations to outsource business operations. All this will result in further expansion in business/investment opportunities in Sri Lanka’s economy.

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United Nations Organization for Industrial Development (UNIDO) program kicks off in Colombo

Pioneering work on the new country program for Sri Lanka 2020-'24 of the United Nations Organization for Industrial Development (UNIDO) commences in Colombo. "UNIDO activities have a long history of developing the industrial value chain and enhancing Sri Lankan products ' quality infrastructure. The new country program based on Sustainable Development Goals related to industry and innovation called the SDG 9 framework, "Nawaz Rajabdeen, National Director of Focal Point, Sri Lanka, said on January 23.

UNIDO National Director Rajabdeen addressed the work on the new UNIDO Sri Lanka Country Program 2020-2024 (UNIDOSLCP) on 24 January with the UNIDO high-level UNIDO team visiting Colombo. Ralf Bredel, Head of the Asia Pacific-UNIDO Regional Division Vienna International Centre, Senior Research and Industrial Policy Officer-UNIDO Vienna International Center Dr. Anders Isaksson and UNIDO Representative Rene Van Berkel, Regional Office-India, are now in Colombo to formulate UNIDOSLCP ' 20-'24.

' The formulation of the new industrial policy of Sri Lanka focused on the demands and requirements of local industries, the implementation of green concepts and industrial health are the pillars of the current UNIDOSLCP ' 20-'24 '' said UNIDO Representative Rene Van Berkel, Regional Office-India and added: ' This is a major support for the Sri Lankan industry sector since the last country program successfully closed in 2015. The new program is Sri Lanka's first such program involving inclusive and sustainable industrial development." "World countries are developing their development programs around the UN Sustainable Development Goals (SDGs).

The ' SDG 9 system ' is the business-related SDG, and the latest UNIDOSLCP ' 20-'24 research will produce with SDG 9 in mind and local industry needs, "said Asia Pacific-UNIDO Vienna International Center Chief of Regional Division Ralf Bredel, adding:" SDGs are the global targets for our survival. With SDG 9 Framework, Sri Lanka will begin to integrate the best practices in the international industry. "UNIDO National Director Rajabdeen stressed the success of numerous UNIDO programs and their contribution to the Sri Lankan economy.

"Including many UNIDO interventions here, Strengthening SMEs ' Trade Competitiveness, Bamboo Processing, Cinnamon Value Chain Mapping and PCB Waste Environment Management are four major UNIDO projects that have strengthened local industries. The new UNIDOSLCP ' 20-'24, whose work begins on 24 January, will carefully examine the needs of local industries and initiate focused initiatives for these industries. We expect all local industry reviews to be finalized by May 2020.

OSL Take: The large business delegation visiting the UK to boost trade ties with other Commonwealth nations as well as Sri Lanka’s close working relationship with the Commonwealth Secretariat where it receives technical assistance when preparing free trade agreements (FTAs) indicates a strong position held by Sri Lanka in the Commonwealth.

It would work to boost the interest of businesses/investors in Commonwealth nations to explore opportunities in Sri Lanka. Also, businesses/investors outside the Commonwealth interested to engage in business with Commonwealth nations could use Sri Lanka as a base to carry out their activities.

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South Korean Govt. approves funding for Kandy tunnel

Cabinet accepted this week a plan by Roads and Highways Minister Johnston Fernando to launch procurement activities related to the development of a by-pass tube in the urban area of Kandy, for which Korea's Economic Development Cooperation Fund has agreed to provide financial facilities amounting to $199.27 million.

The by-pass tunnel mooted as a solution to congestion of vehicles in the urban area of Kandy, a project whose total estimated cost is $252.30 million. The project consists of four 5.5 km long tunnels from Suduhumpola to Tennekumbura via Bogambara and Ampitiya, which will be the lengthiest tunnel in Sri Lanka.

Korea Exim bank will finance this project with a very concessional interest rate EDCF loan of 0.15 percent and a repayment period of 40 years, including a grace period of 10 years. The project executing department will be the Sri Lankan Ministry of Highways and Higher Education, whereas the Road Development Authority (RDA) will be the project implementing entity.

The project's main objective is to relieve traffic congestion in the center of Kandy by constructing bypass tunnels for many vehicles that want to go to Kandy's West or East without reaching Kandy Lake City. After completion, the tube expected to reduce the passage time from Suduhumpola to Tennekumbura during rush hour traffic from two hours to less than 30 minutes. In doing so, the Kandy tunnel will save money by reducing additional fuel consumption and air pollution near the Sri Dalada Maligawa (Sacred Tooth Relic Temple).

Moreover, the tunnel will improve Kandy's economy by providing a short link between the Kandy industrial zone and the A1 road to Colombo, where container terminals located for export.

The construction project for the Kandy tunnel has not only economic importance but also a diplomatic impact. The decision by the Korean government to provide $200 million for this project comes at a significant time, as 2017 marks the 40th anniversary of Sri Lanka-South Korea diplomatic relations.

Korea's Export-Import Bank (Korea Exim bank) lends the Official Development Assistance (ODA) loans to international development and collaboration through the Economic Development Collaboration Fund. In 1990, the bank received its first ODA loan to repair the Colombo-Galle road (A2). The bank has, as of now, funded $805 million for 28 Sri Lankan development projects.

Korea Exim bank also provides funding to facilitate bilateral economic cooperation for international trade and overseas investment. Korea Exim bank has received $386 million since 1978, both for trade between Sri Lanka and Korea as well as for foreign direct investment by Korean companies in Sri Lanka.

OSL Take:  The government of Sri Lanka has launched several programs to attract foreign investments to the country. The recently held investment promotion program in Seoul is one such venture. The exposure received by Sri Lanka through such promotions has resulted in many foreign businesses/investors expressing interest and exploring business/investment opportunities in the island nation.

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Sotheby’s positive about interest re-emerging in Sri Lankan real estate

Sotheby's International Realty in Sri Lanka says investor interest in properties on the island of the Indian Ocean is re-emerging, and the company is looking for market properties outside Colombo's capital. "Sri Lanka Sotheby's International Realty is satisfied to announce that it is receiving positive signals from the market, with increasing interest from various quarters around the world in Sri Lanka and particular properties on the island," the real estate broker.

"Sotheby's expects 2020 to be much better than 2019." With interest re-kindled in Sri Lanka, Sotheby's is looking to market properties outside of Colombo. "The company is looking for character properties, historical heritage, modern architectural masterpieces, properties situated in places of natural beauty, all of which Sri Lanka has in abundance," the company said.

The firm is marketing Sapphire Residencies, a high-rise luxury property in the capital Colombo promoted by India's ITC group. In 2019, an economic downturn, value-added tax on Easter Sunday assaults on residential property, and political instability hit Sri Lanka. "All these factors now appear to be easing to allow more hope and optimism among all stakeholders," said Sotheby's. While interest is growing, prices are under pressure in the country, and ' realistic ' expectations will guide sales, the firm said.

"The gradual electoral permanence and progress in the overall security situation, although it will still be a buyers ' market, has boosted confidence in the local and international market," the company said.

"It is evident that estate prices will tweak to the current market circumstances, where realistic seller expectations will improve sales chances.” It is only natural that after such a marked downturn in the market, international buyers will be scouting attractive investment opportunities on the island."

Also, increasing demand from local and international companies for quality office and business space is spurring private-sector investment. Alone at the Port City, the suggested International Financial Center will add 5.65 million square meters of new mixed-use property.

Attracted by the robust economic growth, developers from far away are increasingly focusing on Sri Lanka, particularly Colombo; concerning significant current Chinese investment in Colombo, the Japanese company Belluna Co. has lately announced plans to invest US$ 500 million in real estate projects here.

OSL Take: Sri Lanka's government's aggressive development program has further risen property prices, making properties on the island an accessible investment opportunity with short-term advantages. The proposed project of Colombo Port City will also improve land value. Foreign businesses/investors could, therefore, explore possibilities for business/investment in the real estate industry in Sri Lanka.

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Slovenia seeks investment and business opportunities in Sri Lanka

A delegation of senior Slovenian diplomats visiting Sri Lanka recently held talks in Colombo with Chairman of the Sri Lankan Investment Board, Susantha Ratnayake. The delegation headed by Slovenian Ambassador to Sri Lanka based in New Delhi, Marjan Cencen, and Minister Plenipotentiary, Ms. Mateja Vodeb Ghosh.

The ambassador visited Sri Lanka to present his credentials to the President of Sri Lanka and to explore more opportunities for economic cooperation as well. The delegation also had several meetings arranged by the Foreign Affairs Ministry. Ambassador Cencen expressed his willingness to establish commercial relations between Slovenia and Sri Lanka, adding that Slovenia was interested in two-way cooperation, which would benefit both countries. Slovenia was interested in investing in specific projects.

Although a small country Slovenia is a member of the European Union, the most significant trading group in the world, and also a part of the euro currency zone. Slovenia provides travel benefits as well as being a part of the Schengen zone. The Ambassador said Korean Hyundai Cars are manufactured in Slovenia and shipped to countries in the European Union.

The BOI Chairman has shared some of the Government of Sri Lanka's ideas and priorities. He briefed the Slovenian delegation on the strategic goal of the President to establish the assimilation of smart technology in Sri Lanka that would lead to an increase in the level of digitalization of the country. He also spoke about the Regime's plans to grow renewable energy sources and make it the country's leading source of energy by 2030.

In light of the recent global trade tensions, Sri Lanka also stood to gain from rising Chinese investment. The benefit of Sri Lanka, as the Chairman said, was that the country enjoyed friendly relations with all nations, as well as market access through free trade agreements with India, Pakistan, and Singapore.

Several critical sectors were identified during the discussion and discussed as areas of possible future cooperation. These included pharmaceutical, where Slovenia has a strong industry, and Sri Lanka is keen to develop as part of a policy on import substitution. In the area of renewable energy, too, Slovenia is good and could share some of its experience with Sri Lanka. The European country has also set up an artificial intelligence center at its capital, Ljubljana.

Specific fields of cooperation addressed include car parts manufacturing and tourism cooperation. In the future, both sides agreed to establish more exceptional economic relations.

OSL Take: Sri Lanka has recorded overall growth in the export manufacturing sector during the past few years and the growth momentum expected to further improve in the future. Sri Lanka’s many trade agreements, as well as trade concessions enjoyed by the country, have given the edge to local exports in the global market. Like the ceramic and brick manufacturing sectors, Sri Lanka has many products targeted at the export market. Slovenian businesses/investors could, therefore, explore business opportunities in Sri Lanka’s export manufacturing sector.

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Qatar to assist Sri Lanka in sustainable energy production

The State of Qatar has expressed its commitment to assist Sri Lanka in developing a dependable network for sustainable energy generation, and a syndicate of top-notch energy sector companies will join the initiative. This promise made by Saad Sherida Al Kaabi, Qatar's Minister of State for Energy Affairs, when he called for President Gotabhaya Rajapaksa at the Presidential Secretariat this morning.

The Qatari minister, praising President Rajapaksa on his recent election victory, also called for the appointment of a Sri Lankan side special envoy to further negotiate the implementation of the proposal. In response to Minister Al Kaabi, President Rajapaksa said he was very interested in getting help from Qatar to generate energy.

It that 80% of the future energy needs of the country will be met with renewable energy, the President said, enhancing that he would appoint Secretary to President Dr. PB Jayasundara as the Government of Sri Lanka's representative.

The Minister visiting also invited the Secretary of the President to visit Doha to look into related matters. During the visit, Sri Lanka's electricity generation program will discuss. He said the State of Qatar projects in Pakistan and Poland successfully implemented.

President Rajapaksa mentioned that Sri Lanka hopes to strengthen further bilateral relations with Qatar that go beyond the generation of energy. "We need our tea, vegetables, mainly organic vegetables, and fruits to market. Sri Lanka has a very high potential to deliver these goods to other countries, "said President Rajapaksa.

In a positive response, Qatar's minister of state said his visit to Sri Lanka would be the first step in such a relationship. Also present at the conversation were Ministers Dinesh Gunawardane and Susil Premajayantha, Qatar ambassador to Sri Lanka Jassim bin Jaber Al-Sorour and presidential advisor Lalith Weeratunga.

OSL Take: The government of Sri Lanka is continuously exploring solutions to address the rapidly increasing demand for electricity. The government is also focusing on sustainable energy generation methods. Therefore, Sri Lanka’s power and energy sector is a hotbed for business/investment opportunities. Further in last year, the Net Zero Carbon status achieved by a Sri Lankan apparel factory indicates the technologically advanced state as well as the eco-friendliness of local manufacturers.

Sri Lankan industries, especially the apparel sector, are keen on making their carbon footprint zero and have taken many initiatives to promote the concept. Qatar businesses involved in introducing zero-carbon technologies could explore the many business opportunities in Sri Lanka’s industrial sector. Such technologies could be upgraded and added to other economic areas in Sri Lanka as well.

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Government to build 300 new universities in Sri Lanka

Sri Lanka will create 300 university colleges where students who are unable to enter national universities can join and earn an advanced national diploma, Bandula Gunawardane, minister of higher education, said.

This year, 181,000 students have passed university requirements for Advanced-Grade Earning Entry. However in tax-payer funded universities, there are only about 30,000 seats, leaving about 150,000 high and dry, he said.

Sri Lanka is, in many aspects, a development success story. The country’s robust economic growth for over a decade has helped to reduce poverty and promoted shared prosperity. In 2010–13, with an average annual growth rate of 7.5 percent, Sri Lanka was the fastest-growing economy in South Asia. Gross domestic product (GDP) growth continued in 2014, reaching 7.4 percent, driven mainly by services, manufacturing, and construction. In 2016, the country’s per capita GDP expected to reach US$4,000. Measured by per capita consumption and using the national poverty line, Sri Lanka’s poverty rate dropped to 6.7 percent in 2012/13 (World Bank 2016).

President Gotabaya Rajapaksa has promised opportunities for higher education to all students who meet entrance requirements before the end of their term, and the first phase is now beginning. Entry to existing universities for the next academic year will increase by 25 percent.

Union colleges will built using existing facilities and technical schools and related state departments that are underused or unused rather than spending money on new buildings, he said.

At least 100 such colleges will be established by the end of 2020, which will issue two year diplomas. Many of the vocational colleges in Sri Lanka had unused or underutilized spaces and facilities, Minister Gunawardane said.

The university colleges will concentrate on IT, Software Engineering, and English. Such students will have a credential that Minister Gunawardane said can be used globally.

Meanwhile, the government will also grant the better private degree-awarding colleges ' Chartered ' status, which will monitor on an ongoing basis, he said.

OSL Take: In Sri Lanka’s quest to become a knowledge hub for Asia, Education and Training have undoubtedly become the key sectors of focus. Although Sri Lanka has a very high literacy rate and is producing graduates who are of ever-increasing quality, there is very much room for improvement in the sector. The government policy of creating a dynamic education sector with the involvement of the private sector to create competition and breathe new life to a system that may have stagnated has created a wealth of business opportunities in Sri Lanka for those who are interested.

The focus of the newly elected government in enhancing the education sector is a clear indicator of the emerging business/investment opportunities in Sri Lanka’s higher education sector. Sri Lanka has given priority to the country’s education sector in line with Sri Lanka’s long term development plans. Many foreign universities have opened pathway colleges in Sri Lanka as well. Therefore international businesses/investors could explore business opportunities in Sri Lanka’s higher education sector.

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Government awards LKR 4.2 billion Road Connectivity Project tender to MAGA Engineering

Sri Lanka has an approximately 120,000-kilometer road network sufficient to meet 90% of transportation demand. The Road Development Authority (RDA) is responsible for the maintenance and development of national roads of the A and B classes and 4,480 bridges over the total length of highways. The regional councils were responsible for about another 15,000 kilometers of C and D-class highways. Local governments and other government and private institutions maintain and develop the balance.  

MAGA Engineering (Pvt) Ltd of Sri Lanka has won an international bid of 4.2 billion rupees to develop the roads from Kirulapone to Godagama, and from Pamankada to Pokunuwita in the Western Province, the cabinet office said in a statement.

The tender called under the Southern Road Connectivity Project of the Asian Development Bank and MAGA Engineering's bid chosen as the most competitive by the standing cabinet appointed commission on procurement.

Minister of Roads and Highways Johnston Fernando had submitted a proposal to provide the tender to MAGA Engineering, which had been approved by the firm.

The road improvements would include sub-base, aggregate foundation, and asphalt concrete overlay, concreting drainage maintenance and upgrades, culvert repair and installation, bridge building and expansion, traffic signals repairing, and street lighting, and service relocation.

OSL Take: The LKR 4.2 billion tender awarded by the Ministry of Road & Highways is indicative of the continuous growth of Sri Lanka’s economy. It is also indicative of the growing business potential in the country.

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 Sri Lanka the ideal business destination in the South Asian region. Therefore foreign businesses/investors could confidently explore business/investment opportunities in Sri Lanka.

The newly elected government aims to improve the following roads in the coming months:

• Colombo-Kandy Expressway and the Port city elevated highway project will be extended and finished without further delays. The network will also connect Kottawa, Battaramulla, and Peliyagoda.
•  The Northern and Ratnapura expressway will also complete, while feasibility studies will conduct to explore the possibility of having an elevated highway at 1000 feet connecting Kandy to Nuwara Eliya.
•  They will also incorporate an overtaking lane at intervals of 3-5KM to ease the traffic congestion in areas identified as bottlenecks.
•   The island-wide network of roads amounting to 120,000 KM, which includes all rural roads, has neither been developed nor maintained. Therefore, the entire road network that has fallen into a state of disrepair and neglect will be resurfaced and modernized to conform to international standards.

OSL, as the pro-active FDI generator to the island, now calls upon Chinese investors to partner with OSL to bid for Road network-related Projects open for investment through the PPP model. Have a free consultation with the biz-friendly OSL Team today to learn more about the scope available and the way to move forward.

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