The government has agreed that the Port of Hambantota operations and Mattala Airport operations will be done by Public–Private Partnership (PPP) together with Chinese Companies, Prime Minister Ranil Wickremesinghe said.
He was speaking as the Chief Guest at the Institution of Engineers of Sri Lanka yesterday. The sale proceeds accruing to Sri Lanka’s official reserves from the Port of Hambantota will be over USD 1 billion, he said. “In addition, progress has also been made towards completing a PPP with another Chinese Company for Hambantota Airport. As a result, a further amount will also be added to the country’s official reserves,” the Prime Minister said.
“These two transactions would constitute non-debt creating FDI inflows which will help increase unencumbered official reserves significantly. Such reserves would have a more favourable impact on stabilising the exchange and interest rates than building up reserves using borrowed sources. The increased reserves can also serve as a useful cushion in the context of the expected increase in US interest rates and other Global Financial Market Development.”
Prime Minister Wickremesinghe said the time was right for Sri Lanka to undertake myriad development projects to leapfrog from a middle-income to a high-income country, as economic power shifts to Asia, and South Asia in particular.
The Prime Minister insisted that the country must make maximum advantage of, as he put it, a once in a lifetime opportunity to develop.
“If we miss this chance now, we are going to miss it altogether,” he said.
Wickremesinghe illustrated his vision for the future of the Sri Lankan economy, one that must veer away from its traditional strengths and embrace technology. “And the development that we are thinking of, it is not really about industrialising, but going into, as Minister Ranawaka said, a knowledge-based economy and promoting innovation,” he said.
“We are going to need more engineering, more technologies, and more engineers. We started the Techno City. This is part of promoting innovation. Without innovation it is useless undertaking all this development,” he continued.
One factor that could constrain the country’s development, however, is a shortage of technological experts.
“I’ve talked to the Minister of Education, and I told him let’s have more science teachers, so that every student who likes it can take a science subject, maybe mathematics, maybe physics, maybe IT,” said Wickremesinghe.
He added that the country is in talks with various universities from all over the world to open campuses in Sri Lanka that would help develop its base of skilled workers.
Besides speaking on the importance of building the capacity of the workforce, Prime Minister Wickremesinghe lauded continuing infrastructure development projects in Kandy, the Colombo area, and especially Hambantota.
“We are now in the process of negotiating public-private partnerships for the Hambantota harbour and the Hambantota airport. We will finalise the discussions, we hope within the next month or so, and we will have over one billion dollars available in our reserve, reducing our debt. That is money coming into our reserves to strengthen us at a time where the global economy is weak,” he said.
“We look forward to working together with you all to tackle this massive leap in Sri Lanka’s development,” he concluded.