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Prime Minister Ranil Wickremesinghe shakes hand with Chinese Ambassador Yi Xianliang in Hambantota - Pic by Ruwan Walpola.
Prime Minister Ranil Wickremesinghe on Saturday said it was former President Mahinda Rajapaksa who first understood the necessity of industrialising the Hambantota area to develop the Hambantota Port and this Government is only implementing his initiative.
Addressing the inauguration ceremony of the Sri Lanka-China Logistics and Industrial Zone (SLCLIZ) to be set up within the Ruhunu Economic Development Area in Hambantota on Saturday, the Premier said the former President had discussed the development of Hambantota with the Chinese President during his time in power and had signed an agreement on 16 September 2014 to begin industries in the area.
Ahead of the launch, protests and clashes forced Police to use teargas to disperse the crowd which had gathered in Hambantota.
The Prime Minister noted that the China EXIM bank loan of $ 1.4 billion should be settled from this year and therefore VAT had to be increased. Under the deal the present government negotiated, 80% of the shares that will be given to the China Merchant Company will cover about $ 1.1 billion of the loan while Sri Lanka will also have a special administrative right with the other 20% of shares.
Speaking about the acquisition of land for the Ruhunu Economic Development Area, the Premier assured that any religious or archaeological lands would not be acquired for the project and 95% of lands that will be acquired are owned by the Government.
According to him, there had been a discussion on Friday with the Tissamaharama chief prelate and former speaker Chamal Rajapaksa and the issues pertaining to the acquisition of lands had been discussed there in detail.
The Premier revealed plans to establish an economic zone called the ‘South-West Corridor’ from Kandy to Wellawaya covering the Central, North-Western, Western, Southern, Sabaragamuwa and Uva provinces. The Western Province is to be the largest city in this corridor. With the implementation of the South-West Corridor initiative about 70% of the population of the country will have a good income. Parallel to that, the North-East Corridor initiative covering the Northern, Eastern and North Central provinces will also be set up.
The Prime Minister said that funds will be received from China, Singapore, India and Japan for the successful implementation of these initiatives and a powerful Sri Lanka will be created in the future.
Under the project many factories and investments will be started in the Hambantota and Moneragala districts. The project will generate thousands of jobs and bring in about $ 5 billion in Chinese investment, the Prime Minister said.
Prime Minister Wickremesinghe said creating the special area for Chinese investors was aimed at making the debt-burdened Hambantota Port viable and the idling port and the Mattala Airport built with the Chinese loans would become profitable ventures with the success of the massive development program.
“The Hambantota Port was going to sink us but we are now trying to leverage it to create new economic activity and boost growth,” Wickremesinghe said.
Chinese Ambassador Yi Xianliang said the zone could generate up to 100,000 jobs and benefit the residents of Hambantota as well as the rest of the island.
“In the next two to five years, if everything is okay, there will be about $ 5 billion of (Chinese) investments in this zone,” Yi said, adding that 100,000 new jobs were envisaged.
The Government also plans to set up a nearby industrial zone where Chinese companies will be invited to set up factories. It is also expected to immediately sign a few other agreements to commence cement manufacturing plants, LNG plants, oil refineries and dockyards within a land extent of 1,200 acres owned by the port of Hambantota with an investment of approximately $ 4 billion.
The zone will be implemented under three phases on 15,000 acres of land. Around 2,400 factories which generate nearly 400,000 direct and indirect job opportunities, especially for the youth, are also expected to be established in this area within six years, the Government said.
Minister of Development Strategies and International Trade Malik Samarawickrema said that in addition to the Hambantota Port, the Government also planned to develop the Trincomalee Port with investment from Indian and Japanese companies.
