Atchchuvely, the first post-war industrial estate in the north

Tuesday, 10 July 2012 00:37 - - {{hitsCtrl.values.hits}}

Q: What’s so special about Atchchuvely?

A: Atchchuvely was a industrial zone set up way back in 1970 by the Industrial Development Board in view to stimulate entrepreneurship in the Jaffna peninsula, which was able to attract almost 36 factory units at that time and even as at 1986 that were 13 industries in operation. However, due to the 30 years of conflict, all factories and industries were destroyed and now as it stands is a land area of 65 acres.

What makes Atchchuvely Industrial Estate special is that it can play the catalyst role in industrial and business development in the Jaffna peninsula. It’s just 16.8 km to the heart of Jaffna town, 19.5 km to the Jaffna Palaly road, 6.7 km to Palaly Airport, 12.6 km to the Kankesanthurai harbour and railway station, 10 km to the Thellipalai Railway station and 9.2 km to the Chunnakam Railway Station. This gives us a view of the centrality of the Industrial Estate and how it can drive economic growth for the peninsular.

Q: Who are the key stakeholders of the project?

A: The key stakeholder is the Ministry of Traditional Industries and Small Enterprise Development where the Minister in charge was personally involved in sketching the architecture of the Atchchuvely Industrial Zone, ably assisted by the Secretary who helped in sourcing the funding that was required for the development agenda. The Industrial Development Board is overall in charge of Atchchuvely Industrial Estate; that includes selection of beneficiaries and driving the development of industrial zones in the country.

The Government of Sri Lanka has invested almost Rs. 25 million for the initial work like conducting the demand survey, soil testing, initial environment examination and ground water/surface water testing together with the project management partner, the United Nations Office for Project Services (UNOPS), whilst the development of the zone is being done by grant funding by the Government of India that is around Rs. 200 million. This makes the project novel with a tri-party agreement for the development of industry and commerce in Jaffna.

Q: What about Ministry of Economic Development involvement?

A: The Minister of Economic Development was a key to making this project a reality. From the initial idea stage right up the signing of the agreement, it was all done under the guidance of the Ministry of Economic Development, which helped a great deal given that Industrial Estate Development needed to be connected to the overall economic development agenda that includes the dairy industry, agriculture and now the industrial development agenda.

This once again makes the project a novel project given that it is the first post war industrial zone in the Northern Province that is being developed in a holistic view that can actually be replicated across the country.

Q: Why do you think UNOPS got selected to do this task for Sri Lanka?

A: We work very closely with the Government of Sri Lanka in being the Project Manager for many infrastructure development projects, which has exceeded 250 million dollars in the last five years.

The portfolio includes hospitals like the Karapitiya Trauma Centre, almost five large bridges like the famous Irakkakandy Bridge in Trincomalee to fisheries harbours and landing sites like Nilwala in Dickwella, building of large schools in the Eastern Province and also construction of roads. One of our projects we did in Ampara on solid waste management starting from collection of waste to the manufacture of compost has been shortlisted for a global award.

But a key point to note is that all the projects are based on the Government of Sri Lanka’s economic development agenda and prioritised by the relevant line ministry with which we work closely in finding funding so that the people of the country benefit. So, all credit goes to the relevant line ministry and the Government of Sri Lanka whilst acknowledging the donor who funded the projects just like the case of the Atchchuvely Industrial zone.

Q: What is the progress so far?

A: The perimeter survey has been done, the demand survey on the 52 investors who are keen to set up business has been done, land clearance and the IEE are in progress. The construction of the administrative building has been done with Government funding and driven by the Industrial Development Board and now the selection of the contractor is being done together with the relevant stakeholders so that the work can begin as per the time plan.

Q: What’s about the demand chain work?

A: From a demand chain, the response has been very strong. Already there are 52 investors who have committed in writing their interest to set up business in the Atchchuvely industrial Zone from which almost 20 to 25 will be selected by the Industrial Development Board to be housed in the Phase 1 development agenda. Thereafter the phase 2 development will begin so that the others can be placed.

Given the strong leadership from the Ministry of Traditional Industry, concessionary funding and vocational training, value chain development work has already begun so that the sustainability of business can happen for those setting up in the Atchchuvely industrial zone. This makes the project a prototype project. We are also working towards making this the first Green Industrial Zone in the country, which needs some work for sure.

Q: Why green?

A: A recent study published UN report on climate change has reported that Sri Lanka registers a MtC02 emission of 11.5 annually whilst China is at 5007.1, India records 1342.1 and Pakistan 125.6, which means that Sri Lanka is one of the cleanest countries in the South Asia belt. We must now plan our industrial development agenda in the same manner so that we maintain this unique position. This is why we are very keen to make Atchchuvely Industrial Zone a flagship estate in Sri Lanka. Given the leadership that is very committed from the Ministry of Traditional Industry, this can be a reality.

Q: What are your views on industrial estate development in Sri Lanka?

A: Given that over 70 per cent of Sri Lanka’s economy is driven by the SME sector with the export industry also demonstrating this same industrial structure, one way to make a SME a large enterprise is by the development of industrial estates in the country. The advantage for a small medium enterprise to enter an industrial estate is because the basic infrastructure is provided and there are many supply chain and demand chain connectivity options that one can reach up via the Ministry of Industry and Commerce and the Ministry of Traditional Industries.

Q: Any thoughts on Sri Lanka’s industrial estate development agenda?

A: As per the Rio+ country report of Sri Lanka, there are currently around 20 industrial estates fully operational whilst seven are works in progress. A further six are proposed. In the estates currently operational, 255 industries are in commercial operations employing almost 13,855 people, which gives us a view of the emphasis on this sector.

There are many planned developments as per the report, which is very encouraging: Vavuniya (50 acres), Mannar (25 acres), Batticaloa (25 acres) Madampe (Stage 1-25 acres), Pallekele (25 acres) and development of a dedicated industrial estate for pharmaceuticals and medical equipment in Kurunegala (48 acres).

At least six industrial estates are in the planning stage in various parts of the north and east, which computes that almost 28,000 will be employed when full capacity is reached. This clearly shows that this is the future growth area for Sri Lanka.

I saw a number which states that the total investment in the industries in operation within the current industrial estates is approximately Rs. 26.9 billion, which means that with the new development agenda in place, this sector has the potential to support the country’s quest to be a 100 billion dollar economy from the current 59.