Minister Bogollagama targets $ 1 billion FDI this year

by L. S. A. Wedaarachchi

Minister for Enterprise Development and Investment Promotion Rohitha Bogollagama is confident of achieving the US $ 1 billion target set for Foreign Direct Investment (FDI) this year. He said the total value of the traditional foreign investment in Sri Lanka up to 2006 had been US $ 235 million. The investment was the same even in 1994 when he left the BOI as chairman.

Following the vigourous effort by Minister Bogollagama under the guidance of President Mahinda Rajapaksa, foreign investment in Sri Lanka has taken a new turn during the last nine months.

Minister Bogollagama said that the success of bringing foreign investors to Sri Lanka during the last few months could be attributed to focusing Sri Lanka in a very favourable light.

"Terrorism is confined to eight districts out of twenty-five in Sri Lanka. The Government proved to the world that terrorism can be dealt with. At present highly strategic centres in Sri Lanka namely, Trincomalee and Sampur are under the full control of the Government.

During the last twelve years, Sri Lanka has not been able to brand herself correctly to investor groups.

The previous administrators gave major importance to the Ceasefire Agreement and the peace talks just to hang on to power . That is why the FDI was blocked during that period from 1994", the minister said.

"Prima Ceylon Ltd. is the largest investment worth over US$ 200 million Prima, Mitsui Cement which is worth over US$ 70 million set up their operations in Trincomalee. They were not affected by terrorism.

Those facts were not presented correctly to the investors and consequently investors ignored Sri Lanka. Prospective investors in India, UK, Malaysia, Singapore and Europe met the Investment Promotion Minister and BOI officials during the preceding months.

The highly successful Sri Lanka investment round table conference held in London brought leading Sri Lankan businessmen and their British counterparts together to explore new and mutually beneficial avenues of investment.

Twenty-five Sri Lankan companies who participated met 150 British companies. Another area where Sri Lanka leveraged during the round table conference was Sri Lanka's international links such as free trade agreements with India and Pakistan and the GSP agreement with the European Union.

The immediate result was the approval of the Grange Hotels project at Rathgama in the Galle district. This project will boost Sri Lanka's tourism industry. Discussions were held with Marks and Spencers to set up a logistics hub in Sri Lanka.

According to Minister Bogollagama FDI projects on infrastructure development, urban development and production sectors have been finalised and some of them have already commenced activities here.

The US$ 250 million Telecommunication expansion and development project, US$ 300 million Norochcholai coal power project, Trincomalee 500 Megawatt NTPC plant project, Hambantota Petroleum refinery project and 20 mini hydro power projects are some of them.

Under the urban development sector a number of projects have been finished. A forty-two storeyed, US$ 70 million housing project at Dawson Road by Keangnam Korea, the forty-nine storeyed housing project at Galle Road by Jayapooriya of India and the US$ 250 million Havelock City project are outstanding projects.

The FDI projects of leisure and recreation development and production sectors are also being finalised.

The minister said that one way to beat terrorism is development and that is why President Rajapaksa is keen on developing key areas in the North-East.

He said that they have identified Trincomalee as an area for major developments where big time world players would be investing. "I have already negotiated with a Singaporean oil dredging logistic providing company to invest in Sri Lanka. This company is one of the largest in the world", he said.

"We wish to convert Trincomalee to a mini Singapore as we have identified that we could offer our services to India, China, Vietnam and the Gulf countries from Sri Lanka.

During the last nine months the BOI signed 26 agreements of which 20 were for new projects and six supplementary agreements for expansion of existing agreements. Rs. 14,666.32 million is from local investors and Rs. 3053.58 million is funded through foreign investors, making a total of Rs. 17,719.90 million. These projects will generate 2,183 jobs.

Minister Bogollagama left the island on October 14 for an investment promotion mission to Singapore.

The minister will hold discussions with Lionel Lee, Managing Director Ezra Holdings which built its first floating production storage and offloading (FPSO) facility vessel. Converted from old oil tankers, FPSO vessels are used to extract and store crude oil and natural gas from oil fields that are deep in the ocean.