Work at the 161-acre dedicated Chinese Special Economic Zone (SEZ) at Mirigama has come to a grinding halt due to some disagreements between the Chinese investor entrusted with the task of setting up and managing the zone and the Sri Lanka Board of Investment (BOI), informed sources said.
The Chinese conglomerate Huichen Investment (Holdings) (Pvt) Ltd is planning to abandon the project due to the failure of the authorities to fulfill their requirements, in accordance with the agreement, a local representative of the company said. The company has already developed infrastructure necessary for the setting up of the Special Economic Zone.
The newly developed SEZ was to have standard buildings, which will enable investors to invest on factories. Internal roads, water and power capacity was to be enhanced in addition to sewerage and other facilities. The newly developed SEZ was also planning to have standard buildings, which will enable investors to invest on factories.
These activities have now been halted, he said. Political analysts said the Chinese engagement at Mirigama is in the wider context of the Sri Lanka Government’s enhanced relationship with China in the post-war era where China is involved in a series of projects including the Hambantota port and airport and the Norochcholai Coal power plant. Concessionary loans from China has also been flowing in since relations between the Government and the West turned sour over human rights issues.
A senior official of the BOI told the Business Times that Huichen Investment Holdings (Pvt) Ltd has made a request from them to set up a tourist resort at the Mirigama SEZ and they are waiting for the approval of the Tourist Board on this proposal. He said that the company has not informed them officially about any plan to abandon the project. However, he noted that the work at the zone has been stopped midway due to the delay in granting approval for the tourist resort project. \
The Chinese investors are looking at developing facilities such as hotels and restaurants. For this purpose, approval of the Tourist Board is necessary. The company’s earlier interests had extended to a wide range of economic sectors and activities such as machinery and equipment, electric motor-cycles, light vehicle assembly, manufacturing buses, ambulances and agricultural machinery but not the tourist resort projects, he added.
According to the development plan, notable construction at the SEZ will include an administrative building, supermarkets, banks and office areas. The Chinese investors are also looking at developing facilities such as hotels and restaurants. Houses for workers will be provided within the industrial block.
The BOI SEZ at Mirigama has a 33 KW power supply from the Ceylon Electricity Board (CEB). The zone is well equipped including drinking water in keeping with WHO standards.
Good road links to the zone can accommodate heavy vehicles and it has a wastewater treatment plant to cope with sewerage needs. The BOI signed an agreement in June 2009 with Chinese conglomerate Huichen Investment (Holdings) (Pvt) Ltd to set up and manage a dedicated Chinese Special Economic Zone (SEZ) at Mirigama.
The Chinese company had agreed to invest US$ 28 million under Phase I and further investments to be made in the next phases.
Twenty-nine Chinese companies had been already identified and they were to commence their enterprises in the SEZ at Mirigama and these industries were generate avenues of direct employment for 200 people.