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| Sunday, 18 December 2005 |
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Business |  |
| News Business Features Editorial
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Southern Highway to boost growth to 10% in the South The 128 Km long new highway will improve access from Colombo to the Southern Region and boost basic transport infrastructure - the key to catalyse rural economic development and drive growth to 10%+ in the Southern Province. The ADB and JBIC supported 'Southern Transport Development Project' estimated to cost Rs. 30 billion will reduce drive time 1 1/2 hours from the current four hours travel time between Colombo and Matara thereby driving productivity up and will catalyse the economic development in the immediate areas to help Sri Lanka achieve a National GDP growth of 8%. The key is to fast track this project so that the benefits to the country can come in earlier said Director, National Council for Economic Development of Sri Lanka Rohantha Athukorala. The budget proposal is for new industries to be set up outside Colombo and Gampaha districts investing not less than Rs.30 million in plant and machinery or building and employing not less than 200 being granted a five to ten year tax holiday. The government granting investment relief, VAT and customs duty exemption on the import of new machinery whilst also interest on any credit facility granted by lending institutions for such industries also exempt from taxes will benefit the country due to the investments in infrastructure development projects such as transport. We can see the holistic approach the government is taking to deliver the national growth target of 8%, Athukorala said. The project consists of three sections. The Kottawa to Dodangoda section (67 Km) funded by JBIC is in progress with the China Harbour Engineering Company commencing work from September 8. The second section from Dodangoda to Kurundugahahetekma is also funded by JBIC. The third section Kurundugahahetekma to Godagama with Galle Port access is funded by the Asian Development Bank (ADB). Construction work is in progress under Kumagi Gumi of Japan. The total project is to be completed by 2007/8 according to the Deputy Director, Department of Foreign Aid and Budget Monitoring, Ministry of Finance. The Southern Highway component will have a major influence on the development of the disadvantaged southern region of the country which has a significant impact on the high level of poverty in the region. The proportion of population below the poverty line in the Southern Region will be reduced to 12% by the year 2010. It is also estimated that growth of the Southern Province will increase to 10% in the near future. |
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