Bids for f irst projects within six months

Megapolis: Unraveling dramatic transformation of the city:

By Chandani Jayatilleke

A host of investment opportunities from industrial estates and townships, and light rail, water and bus transport services will be available for private sector investors under the proposed Megapolis Project.

In an interview with the Business Observer, Head of Investments of the Western Region Megapolis Planning Project, Nayana Mawilmada outlines the current state of play of the project which aims to bring about a radical transformation of the city and its surroundings.

Question: The Megapolis expert team has been working on the master plan for over a year now and investors are eager to find out about the actual investment opportunities available. How do you intend mobilizing investments, what is the government's share and what will be offered to the private sector?

Answer: It is difficult to give an exact number on this figure right now because we are at the early stage. But we are leaning very heavily towards private sector - we expect the vast majority of this to be private sector-driven. That said, some of the initial projects will be with state financing; that is to anchor the investments. Going forward, it would be private sector investments.

Q: What sort of projects are available for private sector investors?

A: For example, in the Megapolis plan we have various industrial estates and townships, like Horana and Mirigama where we are on the lookout for out for the right investors. We are consolidating lands before calling for bids. We expect multiple players to play, because these are very large ambitious investments.

We also expect the private sector to invest in some of the large infrastructure projects such as the proposed highway connecting Kelani Bridge to Battaramulla, water transport around Beira Lake and the Light Rail Transit (LRT) project. We expect local or foreign investors or collaborations between such entities, with previous experience preferably.

For example, right now we are consolidating Beira Lake real estate into one entity. Then we can start to put it out in a rational way. All these will be open to local and foreign investors.

Q: When do you plan to offer the first projects for investments?

A: Within the next six months a few projects will be announced. We were in the planning phase of the project for several months and were trying to get critical backbone pieces in.

These processes take time. Now the government is trying to clarify the status of the proposed Megapolis Authority and we expect the draft act to be debated and the authority's establishment to happen over the next few months. These processes take time; there are various stakeholders and institutions to synchronize under the authority.

We are talking about projects of billions of dollars and they have to be palatable to a majority. It is worth spending time to get it right now through a democratic process rather than making quick and wrong decisions.

Q; How do intend promoting the envisaged investments?

A: We will put them out for transparent tenders. We need to promote it in the countries which have shown a lot of interest already, including Singapore, Japan, China, France, Germany and India. Over the last few months, we had a lot of visiting business delegations.

We hope to do roadshows and international promotions. Besides I would be very keen to explore the Indian interests in the manufacturing space for example, and plugging into India's value chains would be very beneficial.

For India it would be easier to serve southern India from Sri Lanka than from northern India. The proposed India-Sri Lanka Economic and Technology Cooperation Agreement (ETCA) will open up some doors.

Q: What is the legal and regulatory framework for the project?

A: At present we work very much in tandem with the Urban Development Authority (UDA) which is executing a lot of work which we cannot do, like land acquisition.

The UDA will be a separate institution which will work under the overall guidance of the Megopolis Authority. The Megapolis Authority should have the ability to coordinate and synchronize all the various other agencies' operations, such as UDA.

For instance, roads will be done by the Road Development Authority. Housing is a bit of a debate, because UDA is doing a bit, and National Housing Development Authority is doing some.

What will change are land powers which we expect will get consolidated at the Megapolis Authority level. One of the issues we have is that land is disaggregated among so many institutions and it is very difficult to assemble it and mobilize it. That we really want to fix and the Megapolis Act should provide us that provision to pull it all under one window where, at a macro level, we can make policy decisions on how we work on to utilize land.

That will simplify matters for investors - give a single window when they want to find assets in the Western Province. It is an important provision and will settle one of the key hindrances we have. You don't know what plans the other institution is having in connection with a development project as of now.

Q: Why did you decide to prioritize the LRT before the bus modernization project?

A: This is to be financed by Japan International Co-operation Agency (JICA) with a concessional loan. They will do the build out and we're to operate the entire project - managing stations, services and terminal facilities.

Now the LRT project has come to the 'feasibility study' level. My view is they both should happen. The reason we pushed the light rail initially was because it needs a long lead time. We needed to get it started first and we will start looking at the bus network now.

The bus network is essential as it is the feeder network for both electric and light rail systems. While the LRT project is on over the next few years, we will focus on the bus modernization project. We have already had some initial discussions in this regard. We need to do detailed work on this at present. That is of high priority.

Q: How do you propose to go ahead with the bus modernization project?

A: We need to rethink the routing network, considering the buses are a feeding network for light and electric rail transport.

We need better buses with all kinds of facilities such as better quality interiors, comfort, GPS technology and electronic ticketing services.

And thirdly, to set up an organizational structure to run bus services. At present we have several thousands of bus operators while most countries have a handful. We need to give better service first and then implement traffic congestion charges and bring in other rules and regulations.

Q: What is the present stage of activity with regard to the proposed transport hub in Pettah?

A: We are now working on consolidating the lands from Fort railway station to the Technical College junction. We are also strategizing how we can move ahead with the multi modal hub and how we can get it as fast as possible. We are also cleaning up the Beira Lake in a sustainable way.

By end of the year we'll have a clear picture to go ahead with the project. Fort is the most connected town in Sri Lanka, with a half a million persons going through Pettah each day.

There are also 200 acres of land right around the Beira Lake - from along D R Wijewardena Mawatha to Lake House - mostly owned by the government.

Once the framework is in place we are sure the private sector will capitalize on that. Private lands will not be acquired unless it is absolutely necessary - by and large we expect the private sector to develop those lands on their own.

Q: Can you explain how the transport hub will work?

A: The first thing we will do is we will consolidate all the transport activities which are scattered around Pettah/Fort into one consolidated facility. The buses scattered all over Pettah will be consolidated into one integrated building - that will be combined with the railway station building - so it will be a seamless transfer from rail to bus. The light railway will also come straight through that. There will also be a water transport facility within the Beira Lake. That building will also get integrated into the same location.

The idea is to integrate everything for a very efficient customer experience - and at the same time that will release a lot of real estate that is currently used for a very inefficient bus service, from Bodhiraja Mawatha to Manning market.

The Manning market will be relocated. The UDA is doing that now. We are doing urban designing work, how to clean up the lake - the UDA is currently doing lake front walkway development with World Bank funding. We will tender this out.

Q: The Megapolis project promises to create a huge number of jobs. Who will take up these jobs? Do we have sufficient human resources?

A: I think yes. We are looking at creating higher value jobs. We expect people to migrate from lower value jobs to higher value jobs. We are talking of a class of jobs which we do not have here now; they can be higher paying manufacturing, IT, electronic, and automotive industry related industries. And some of those lower jobs will get mechanized and automated.

Q: What message would you like to convey to the business sector with regard to these projects?

A: Transforming a city like Colombo with its issues is not easy. This is part of the process of city building. We are unraveling a very, very dramatic transformation of the city - and if we are successful in achieving 25-30% of what we are planning, we are going to have a fundamentally differently positioned city - much more cosmopolitan, much more globally connected, much more vibrant, ecologically balanced - which is going to be translated into a huge opportunity.

I would tell them to look at the long-term and start positioning themselves now for the opportunities that would be unleashed - such as what will happen in the IT sector, logistics and supply chain.