SEMA plan to convert railways into a profitable venture

by Gamini Warushamana

The Strategic Enterprises Management Agency (SEMA) last week presented an extensive development plan to convert Sri Lanka Railways (SLR) into a profitable venture and a quality transport service provider.

The SEMA plan proposes to increase railway revenue by increasing passenger and cargo handling through a strategic partnership with the private sector.

According to the SEMA plan, 12 railway stations between Slave Island and Panadura on the southern coastal rail track will be developed.

It is proposed to construct sky mall cities with hotels, apartments and office towers on SLR lands at these railway stations. Under the construction plan there are skyscrapers with a five-storey podium where the railway station is on the ground.

The podium will be owned by the SLR. The railway will not sell its land but will hold equity, based on the commercial value of the land and total investment.

The coastal railway line will be modernised with a fast electric urban rail system to provide a frequency based service operating trains at 5,10 and 15 minute intervals depending on the peak and off-peak hours.

SLR will also introduce a modern air-conditioned electric train service by 2009. The aims of the proposal are to find the capital required to develop railway infrastructure and rolling stocks, increase revenue sources and attract commuters to travel by train. SEMA has identified five revenue sources for the railway.

They are; income from equity investment (land and railway assets), rental revenue from shopping malls and other facilities, revenue from utility services that will be provided by the SLR and revenue from car parking and commuter transport.

SEMA will call for expressions of interest from investors next month hoping to sign agreements in June. By 2010 ten railway stations will be converted to rail cities. SEMA has taken the Hong Kong transport system as a model and is also studying the models in Singapore, Dubai, Bangkok and New Delhi.

Simultaneously with the commuter railway transportation development, SEMA is also planning to develop the railway as a state-of-the-art supply chain. SEMA has recognised the strategic importance of the existing rail track that links all economic nerve centres in the country such as ports, estates and trade zones. Under this plan it is proposed to build two rail linked dry ports in Veyangoda and Ratmalana.

The flatted factory concept high-rise industrial parks with integrated warehousing and temperature controlled storage facilities at selected stations are in the plan.

In addition a multi-modal air, sea and land freight transport transfer hub will be constructed at Ratmalana. SLR will also invest in container shuttle trains and build a third track.

SEMA has drawn up proposals to resuscitate 20 state owned strategic enterprises that are now running at a loss and on government subsidies. At present the railway service has deteriorated to rock bottom due to mismanagement, inefficiency, bureaucracy and trade union activities and is running on a near Rs. 4 billion government subsidy.

When the SEMA plan was presented to the media, journalists had reservations on the implementation of this plan as plans had been presented from time to time but none materialised.

Journalists also raised questions about the Colombo-Katunayake rail service proposed by the Sri Lanka Railway and later abandoned, and the Colombo metro service proposed by the BOI a few months ago and its conflict with the new SEMA plan.

How could these plans be implemented with corrupt bureaucrats in these institutions? they said.

Responding to the questions, SEMA chairman Willie Gamage said that SEMA has come up with the best proposals with an agreement of the trade unions as well. SEMA is directly under President Mahinda Rajapaksa and he wants to make these institutions into profitable and efficient institutions instead of privatising them.

Gamage assured timely implementation of the plan.

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