Financial Times

Colombo city on Singapore model

First-time tax holidays for individuals
The BOI will this week announce a new scheme of special incentives to convert individual homes into tourist guesthouses to meet an anticipated shortage of hotel rooms.

For the first time in Sri Lanka, individual house owners would be entitled to three-year tax holidays and duty free imports - normally given only to companies - to make the investment of converting homes to guesthouses financially attractive.

"Tourism authorities anticipate a shortage of hotel rooms for the winter season starting in September and in the next few years," said BOI chairman Arjunna Mahendran. "This season might not be that bad (in terms of rooms) but the trouble starts when we hit 500,000 arrivals."

Amendments to the Inland Revenue Act to provide these concessions were approved by parliament last week.

A team of town planners from Singapore is in Sri Lanka preparing a master plan, redesigning the city of Colombo and its suburbs with industry, technology and entertainment components to make the city an attractive place to work and live.
BOI chairman Arjunna Mahendran said the plan follows a proposal by Prime Minister Ranil Wickremesinghe to double the population of the western region in the next five years. "The plan is to double the population and make it - like Singapore - the preferred destination of choice of living in the sub-continent."

The 30-year plan envisages convention centres, construction of a marina near the Grand Oriental Hotel (in Fort) to attract private yachts and tourists, opening up the harbour to draw more cruise liners, new shopping districts in the Kollupitiya-Bambalapitiya areas and shopping malls.

An entertainment complex in and around Cinnamon Gardens is also planned. Mahendran said the Singaporean team is presently working on the infrastructure part - location of water pipes and telecom - of the plan.

"Once we identify locations for convention centres or shopping malls, the government would advertise these projects and most likely Singapore developers will get involved because of the Singapore government's involvement in the master plan," he said adding that the whole exercise (apart from the preparation of the plan) would be private-funded.

The railway would be moved out of the city to Baseline Road where land would be released for development. Railway land would be used for commercial development.
New monorail services - with some elevated - moving out of Fort in five separate directions, would be developed for public transport purposes.

Mahendran said the former head of a top horse racing company in Singapore and another investor from there are planning a racecourse in Sri Lanka. "They are willing to bring in Singapore's best practices in this sport.

The Singapore government earns $4 billion a year in horse racing revenues while Hong Kong gets $8 billion from this source. This is a great source of revenue to any government." Potential sites for the racecourse are Muthurajawela or Bentota.

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