US$1bn Chinese mixed development slated to come this year
Some US$1 billion worth of Chinese mixed development projects are on the cards this year, according to Board of Investment (BOI) sources.
“It will include a 5-star hotel, a shopping mall and apartments,” a source told the Business Times. He said that this is sure to help them meet the targeted $2 billion Foreign Direct Investment (FDI) this year. “We have a large volume of FDI coming in this quarter (July to September) and in the ensuing fourth quarter (October to December). About 15 projects are in line,” he said. He added that so far this year, Shangri -La of Hong Kong, China’s Colombo International Container Terminal, India’s ITC hotel and Krissh mixed development have begun.
From April to June, FDI has increased by 30 per cent to $430 million, Investment Promotion Minister Lakshman Yapa Abeywardena told the Business Times.
Recently, Malaysia’s Dialog Axiata signed a deal to invest $150 million in mobile, fiber optics and a cable landing station which will be spread over the next three years.
Minister Yapa Abeywardena added that the government, as per a decision by the Cabinet will not pursue and encourage foreign investments in cement, beauty care, retail and agriculture, and that a Cabinet sub committee has been appointed to look into such projects.
Minister Mass Media and Information and Cabinet Spokesman, Keheliya Rambukwella also reiterated to the Business Times that the government will not push projects in these areas as they need to ensure healthy competition (in these industries). However, if the projects are ‘mouthwatering’ such investments will be pursued, he added. “If there’ is a lucrative offer (project), then we will look at it favourably,” he reiterated.
He explained that this decision was taken in a bid to stop flooding of projects (in similar sectors) and unhealthy competition. “We need to ensure healthy competition, if not the market will be flooded and the ‘message’won’t be good,” he said.
He said in retail industry for instance, there were complaints by local retailers (pertaining to unhealthy competition) if foreign investments were allowed. “We can’t get over enthusiastic by the word foreign investments,” he added.
He said mushrooming beauty care parlours / products are also a serious concern.
“At each corner there are beauty salons and there are some issues regarding certain (foreign) beauty products being dumped in Sri Lanka,” he said. Minister Yapa Abeywardena said that for Ayurvedic projects they grant permission, but not ‘all’ spas.
Minister Rambukwella added that whether or not these places create serious employment was also an issue.
“There are massage centres everywhere. The point is there’s a serious issue whether these places create employment. Do we need any more massage centres?”
He said in agriculture also there are local entrepreneurs who are capable of investing in this sector. He said existing investors in these sectors will not be affected with this decision, nor will it be with retrospective effect.
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