Lucky three for H’tota zone

Friday, 5 August 2011 01:08 - - {{hitsCtrl.values.hits}}

By Uditha Jayasinghe

The Hambantota economic zone is preparing to get its first investments, with Cabinet granting approval to three companies to begin operations following the first round of Requests For Proposals (RFPs).

At the Cabinet meeting on Wednesday the Government agreed to award three companies bids to start a sugar refinery, petrochemical plant and fertiliser factory. A second round of RFPs is to commence in October, according to SLPA Chairman Dr. Priyath Bandu Wickrama.

The sugar refinery plant was bagged by Shree Renuka Sugar Ltd. of India for a period of 25 years subject to payment of the royalty figure offered by the bidder. Twenty hectares of land will be allocated to this company on a 25-year lease to operate its sugar refinery plant in Hambantota Port. There will not be any royalty fee during the construction period of 24 months from the date of singing of the contract.

The petrochemical plant was awarded to Peak Energy Ltd. This is a Singaporean company and it will be allocated 15 hectares of land in the economic zone. The lease will be for 25 years. An additional five hectares of land is to be reserved adjoining the above land for future expansions. There will be no royalty fee during the construction period of 20 months from the date of signing the contract. Hayleys Advantis is the only local company to be given the contract for operation of fertiliser storage, processing and bagging plant. The venture will be allocated 2.5 hectares of land and given a royalty fee holiday of 10 months from the date of signing the contract.

However, none of the financial details of these ventures were released to the media at the Cabinet press briefing on Thursday morning.

Following the first round of RFP a total of 27 bidders had submitted their proposals for various business ventures. Out of the 27 bids the Cabinet Appointed Negotiating Committee (CANC) decided to reject four bids due to technical issues and another five offers based on financial lapses. Some of the proposals can only be considered after the port becomes operational.

Two companies that will commence operations once the port is operational is Advance Surfactants Lanka ltd and Laugfs Holdings Ltd. both companies had submitted proposals but could not construct their plants as the area for them is still under construction.