Innovative funding mechanisms vital for rapid development - CCI President

The creation of a special Bank to provide initial capital to "kick start" development projects in Infrastructure, Urban Renewal and Urban Regeneration is now a pre-requisite for rapid development in Sri Lanka, said President, Chamber of Construction Industry (CCI) Surath Wickramasinghe.

He said that countries such as China, South Korea, Singapore and Malaysia through Development of Construction Banks funded their mega projects and developed their construction industry and their countries.

With their expertise they are now venturing to fund and develop projects in other countries. We must follow this example and set up a similar Development/Construction Bank initially to provide seed capital to facilitate mega projects of national importance.

Wickramasinghe said that this Development/Construction Bank could also facilitate to promote balanced development in the country to reduce the disparity between provinces and enhance the "Prosperity Index".

Consequently, major projects that may need initial seed capital could also be funded if viable through this Bank. The implementation could be through a Public/Private/Partnership process.

The Construction Industry and Sri Lanka will benefit hugely and will enjoy a sustainable construction boom for many years.

The country must adopt a 21st century approach for development and there is a urgency to transform the city of Colombo to be more vibrant to be on par with other cities in Asia such as Singapore and Malaysia.

In South Asia, India has already commenced Urban Regeneration projects virtually in all major cities by infrastructure improvements to their highways, relocating slums and shanties and other under served buildings.

The implementation is through Public/Private/Partnerships. Consequently, environmental upgrading and much needed prime land is liberated in their cities to achieve the desired social and economic development goals.

Our experience, on a Urban Regeneration Project at Panchikawatte, is that, due to lack of seed capital say, Rs. 1 Billion the project cannot commence despite it being viable and attractive to developers to invest up to Rs. 80 Billion.

When implemented, the benefits will be enormous not only by transforming a part of the city but also in the areas of socio economic, infrastructure and environmental upgrading, employment opportunities, transfer of technology, capacity building of local firms and several other aspects.

It is also possible to package similar projects for implementation in other parts of the City of Colombo such as Pettah, Slave Island, Colpetty, Borella and Wellawatte.

However, the major constraint is finance. Innovative funding mechanisms must be adopted to attract investment from both foreign and domestic sources.