Business Times

Chinese and Indian companies dominate Sri Lanka’s mega project business

By Bandula Sirimanna

Sri Lanka’s entire mega project business has been farmed out to four Chinese companies and seven Indian companies, with over 30,000 semi-skilled and unskilled Chinese workers displacing local labourers, informed sources said.

Chinese companies are currently handling a Special Economic Zone, a 1000-acre Tapioca farm, Hambantota port, 900 MW coal fired Norochcholai power plant, Colombo-Katunayake Expressway, Palai-Kankasanthurai rail-line, Jaffna housing complex for army and a host of other projects. The entire Hambantota project is expected to cost about US$1.5 billion and a consortium of Chinese companies led by the China Harbour Engineering Company and the Sino Hydro Corporation are involved in the project's construction.

China's Huichen Investment will provide US$28 million and manage a special economic zone at Mirigama for Chinese investors. In addition, China has provided US $1million as humanitarian aid for internally displaced persons and technical assistance for de-mining operations in Northern and Eastern provinces. Some 332 km of roads inclusive of the Kandy- Jaffna A9 highway will be developed and modernized with Chinese funding of US $355 million, according to an announcement on Tuesday, a day after the arrival of India ’s Foreign Secretary Nirumapa Rao on a four-day visit to Sri Lanka.

In the wake of China’s economic dominance in the island, India is also stepping into Sri Lanka’s mega project business in a big way by entering into building construction in the North and East . A Mumbai-based company will manage the project to build 12,500 houses in the Kilinochchi district, a similar number in the Mullaitivu district, 10,000 houses in Vavuniya and 15,000 in Jaffna and Mannar, under the supervision of the Government of India. Indian companies have won bids in railway expansion projects in the North and the South as well as in the proposed coal power project in Sampur in Trincomalee. Power Grid Corporation of India Ltd, National Thermal Power Corporation, Lanka India Oil Corporation (Lanka IOC), Cairn Lanka Pvt Ltd, Lanka Ashok Leyland, and Mphasis are now devising plans making massive investments to expand their businesses in the island. Nearly a 100 Indian companies are currently operating in Sri Lanka and so far, they have invested $400 million or Rs. 45,600 million, sources said.

Commissioner, Labour Standards Division of the Department of Labour, P.S. Pathirana said that the Sri Lanka labour laws are applicable for all foreign workers including Chinese working in Sri Lanka in various projects and institutions. Employers should pay their Employees Provident Fund and Employees Trust Fund money for these workers and employers should obtain a worker permit to recruit foreigners.

The Chinese influence is gradually changing community life in Hambantota and the agriculture industry in the area, residents said. They revealed that over 60 farmers in Hambantota are providing Chinese-type green vegetables to around 350 Chinese workers at the harbour construction site as these vegetables are not available in the Sri Lankan market. The project has been funded by the JICA Livelihood Improvement Programme. It focuses on agriculture, infrastructure and institutional development and income generation among the villagers in Hambantota.

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