Tuesday, December 14, 2010

Sri Lanka Keeps Interest Rates Unchanged to Support Growth

Sri Lanka’s central bank kept its benchmark interest rates unchanged for a fourth straight month to support economic growth as the nation emerges from a 26-year civil war.

The Central Bank of Sri Lanka left the reverse repurchase rate at 9 percent, the lowest level since November 2004, and the repurchase rate at 7.25 percent, according to a statement on the Colombo-based bank’s website today.

Sri Lanka is charting an economic policy aimed at accelerating growth and controlling inflation after President Mahinda Rajapaksa’s government defeated the separatist Liberation Tigers of Tamil Eelam in May 2009. Sri Lanka said Nov. 22 it will cut taxes on banks and builders, adopt an inflation target, and ease foreign-exchange rules.

“The government is keen to boost growth, create jobs and promote all round development after peace returned to the island,” Sarath Rajapakse, director of research at Capital Trust Securities Pvt. in Colombo, said before the report. “Sri Lanka’s inflation is less worrisome compared with the other countries in the South Asian region.”

Sri Lanka’s central bank Governor Ajith Nivard Cabraal lowered rates in July and August and has kept borrowing costs unchanged since then even as counterparts in neighboring India and Pakistan tightened monetary policy. He said Nov. 16 that rates are likely to stay unchanged until next year.

Consumer Prices

Consumer prices in the capital, Colombo, rose 7 percent in November from a year earlier. That’s almost half the average inflation rate in the five years through December 2009 after an expansion in farm cultivation, following the end of the war, boosted production.

India on Nov. 2 raised rates for the sixth time in 2010 to rein in consumer-price inflation running at more than 8 percent. Pakistan boosted its benchmark discount rate on Nov. 29 for the third time since late July. Pakistan’s inflation rate rose 15.5 percent in November from a year earlier, the highest rate among the 17 Asian economies tracked by Bloomberg.

Sri Lanka’s inflation will “remain subdued at mid-single digits, on an annual average basis, by end-year,” the central bank said on Nov. 16.

Rajapaksa, unveiling the 2011 budget in Colombo on Nov. 22, announced plans to lower the value added tax for lenders to 12 percent from 20 percent, reduce the levy on construction companies to 12 percent and offer breaks to tea and rubber companies.

Corporate Debt

The government will allow foreign investors to buy corporate debt in the country, let local residents purchase shares of foreign companies and enable insurers to invest up to 20 percent of their “long-term fund and technical reserves” abroad, according to the budget.

Sri Lanka plans to introduce inflation targeting in its monetary policy in order to keep prices low for long periods, the central bank said Nov. 22. It didn’t say what level of inflation it would target.

Sri Lanka’s $42 billion economy may grow 8 percent in 2010, and expand as much as 9 percent in 2011 as the government spends more on power and roads and tourists flock to the island nation, Cabraal said on Dec. 6.

Prospects of faster growth have also encouraged companies including Aitken Spence & Co. to step up investments in Sri Lanka.

Aitken Spence, Sri Lanka’s biggest operator of resorts, said Sept. 30 it will build a hotel with Six Senses Resorts & Spas in an investment worth as much as $40 million.



Source : Bloomberg
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Monday, December 13, 2010

‘Learn from President’s leadership style’ HNB Chairman tells UNP

By Azhar Razak

Two of Sri Lanka’s veteran corporate leaders, who are currently heading two listed private conglomerates, shared some valuable insights on leadership and management with some young MPs from Sri Lanka’s main opposition party.

Hatton National Bank chairman Rienzie T Wijetilleka said last week that the UNP leader has much to learn from the President’s leadership style which involves keeping everyone together at difficult times, critically reviewing past performance, planning well ahead, taking swift but calculated decisions and motivating people.

“We, at the bank, have to do a periodical review of performance of the leadership as a basic fundamental requirement. Has a similar thing been done in the past 17 years to the UNP,” he queried suggesting that a change in leadership is critical for the party to move forward.

He pointed out that the UNP has lost about 60-65 percent of the votes of the Sinhala Buddhist majority under the current leadership and was being currently projected as a party for the minority.

“This is in sharp contrast to how the party in the past had won the hearts of the majority by voicing the interests of every community in the society,” he highlighted.

To add further woes to the party, he said the President has, on the other hand, successfully and tactfully brought about both socialist and capitalist economic policies in the Budget 2011 creating a severe challenge to the opposition.

“On top of that, there is also a sense of stability that has been brought about to the present state of economy in terms of inflation, interest rates, exchange rates and foreign exchange reserves thus reducing the scope for opposition to challenge,” he mentioned.

United Motors Lanka chairman Ranjith Fernando, speaking on the occasion, meanwhile, took a critical perspective of the government’s approach towards the private sector and questioned the independence of the legal system today.

He specifically referred to the judgment delivered in the recent case pertaining to former UNP MP A R M Cader, who is currently on the government side and compared with the case relating to Sri Lanka’s former army commander Sarath Fonseka.

Outlining emerging trends in the economic perspective, Fernando said that although the government is trying hard to portray itself as supportive of capitalism, it is essentially a socialist due to its recent actions.

“Look at the reversals of privatisations that have taken place in the recent past. Price controls have come in and SME banks are no more. According to recent financials, the state run Lankaputhra Bank is presently incurring a Non Performing Loan (NPL) percentage of 50 percent,” he said.

“If you ask the bankers, they will tell you that the moment you have a five percent NPL you become scared and when that reaches 8 percent it is catastrophic,” he outlined.

Elaborating his point further, he said the government has recently announced it will not allow any private sector firms to set up mini-hydro power firms and will run them by itself.

“Thousands of mini hydro projects are possible to be taken up by the private sector. Look at the airline industry as well and take India as an example on how many domestic private airlines are being run while in Sri Lanka the government has allowed the Sri Lanka Air Force aircrafts to play monopoly,” he questioned.

He also queried on the decision made by the government to recruit a further 12,500 graduates to the public sector when it is already running one of the largest public worker payroll database of 1.8 million.


Per capita income gimmick


Fernando, on the other hand, blasted the Central Bank authorities of fooling the public by reporting GDP per capita numbers in dollar terms which he says should be revealed in Sri Lanka Rupee terms, which would then represent the realistic picture.

“What they say is the per capita income which was at US $ 300 in 1977 only improved to US $1,000 by 2004 and then US$ 2,000 in 2009.”

“However, if these numbers are converted into Rupees at the prevalent exchange rates US $ 300 would have been Rs. 2,661 (at Rs 8.87 per 1 USD) in 1977 and then Rs97,500 (at Rs. 97.5 per 1 USD) and Rs 228,000 (at Rs114 per 1 USD) in 2009,” he said.

“Therefore, if they claim that it has doubled from 2004 to 2009 even in Rupee terms, one can claim that per capita income has increased by 3,564 percent in the 27 years from 1977 to 2004,” he pointed out saying that this a gimmick played by the Central Bank to fool the public.

He said that the Central Bank has increased the per capita income calculation (GDP over population) in dollar terms by artificially appreciating the Rupee.

He further outlined that exports have dropped for the first time in many years in 2009 recording a negative growth and the country was heading towards an economic disaster with a Balance of Payment crisis that is yet to come.

The two corporate leaders were speaking at a panel discussion held last week by the Independent Professionals Forum under the theme ‘Emerging Economic and Political Trends in Sri Lanka’. Others on the panel included Justin Meegoda, Dr Darin Gunasekara, Maithree Gunaratne, and Chamindra Ediriwickrema.

UNP MPs who attended the discussion were Sajith Premadasa, Dayasiri Jayasekera, Gayantha Karunatilleka, Buddhika Sampath, Ranjith Maddumabandara and Rosy Senanayake.

The much awaited Annual Convention of the ‘Grand Old Party’ is scheduled to be held today.


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Walkers Piling wins Rs 400m Colombo deals

Walkers’ Piling (Pvt) Ltd, a 100% owned subsidiary of MTD Walkers and one of the largest piling contractors in Sri Lanka has secured contracts amounting to LKR 400 million to carry out piling work on two major projects: the Department of Labour and the Census & Statistics buildings in Colombo.

These sites have already been mobilised and piling work has already commenced on the sites and is expected to be completed within the next three months on the 35-storey building for the Labour Department and 10-storey Census & Statistics buildings.

Commenting on the new contract Lal Perera, COO MTD Walkers Piling, said: “We are delighted to have secured this important contract which is the largest piling contract tendered by the GOSL for this year. This proves that our reputation as a dependable piling company is underpinned by its track record of delivering challenging and complex projects.”

Walkers Piling (Pvt) Ltd the pioneer Pile Foundation company in Sri Lanka specialises in constructing bored cast in-situ reinforced concrete pile foundations for the past 30 years.

The company was incorporated in 1981 along with Voltas International Limited of India as a joint venture with approvals from Foreign Investment Advisory Committee of Sri Lanka.

In 2008, the company was acquired by MTD Walkers PLC, the only fully-fledged engineering company in Sri Lanka.

Walkers Piling managing director D D Wijemanne said: “As a company, we have been aggressively building our portfolio with a string of recent project wins, and we are delighted to strengthen our presence further with winning the prestigious contracts for the Labour Department and the Census and Statistics buildings.”

He said that to date, the company had successfully completed over 160 prestigious piling projects including pile foundations for the Bank of Ceylon – Merchant Towers at Colombo 3, the Ceylinco Seylan Twin Towers (a joint venture project) at Colombo 3, the Commercial Bank of Ceylon Limited building at Union Place, Colombo 2, the Peoples Church –Assembly God at Kirimandala Mawatha, Colombo 05, and the Sri Lanka Customs Head Office Building located in Colombo.

With the boom in the construction of roadways, bridges and other infrastructure across the island, the piling industry is slated to hit the Rs 4bn mark in the coming year with Walkers Piling already claiming a 40% market share of the business.

Meanwhile, the company posted a ‘best performance’ year for 2010 with expectations for a better year ahead.

Wijemanne said the company aims to purchase two more piling rigs as a part of the Company’s strategy to cope with the heavy demands for contracting services due to the surge in island wide infrastructure development.

“The increased demand for high quality contracting services has been a major catalyst for the expansion of our operations. These new machines will play a vital role in ensuring that Walkers Piling maintains its position in the construction sector.”

The purchase of these two rigs will bring the total number of piling machines in the Company’s fleet to six, substantially increasing the company’s delivery capacity and expediting the piling process overall.

“This acquisition will ensure the entire piling process can be completed much more efficiently, leading to faster completion of foundation construction. This, of course, will have a knock-on effect, enabling developers and contractors to complete their projects sooner,” Wijemanne added.
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Electricity tariff hike may hurt hotel sector trade growth

By Azhar Razak
Sri Lanka’s industry association representing tourist hotels, Tourist Hotels Association of Sri Lanka (THASL), has raised concerns over the future of the industry if the recently proposed electricity tariff hikes for hotels are implemented.
According to THASL President Anura Lokuhetty, the island’s leisure industry would not be able to sustain such substantial increases in electricity tariffs, which has been proposed to be implemented from next year to June 2011.
“We have submitted our representations to the Public Utilities Commission of Sri Lanka (PUCSL) in this regard voicing our concerns on the proposed tariff hike. We hope to get a positive response at the public hearing to be held on December 15 in Colombo,” Lokuhetty told The Bottom Line in a recent interview. He says that the PUCSL has proposed that electricity tariffs for hotels are to be increased from the current Rs 9.30 per unit to a substantial Rs19.50 per unit, a move which would put most hotels out of business due to the extra cost burden.
“With the recent pick of the tourism industry, most of the hotels in the country are presently undergoing a phase of refurbishment by infusing a lot of capital. Therefore, this proposal for a sharp increase of electricity tariffs for the industry at a time like this would definitely affect the leisure industry in the longer-term,” he pointed out.
Having outlined the tariff proposals, the PUCSL in a notice issued recently, has stated that it had prepared a Consultation Paper on the proposed setting of electricity tariffs for the period from 2011-2015 and has requested public representations to be made to the commission in writing on or before December 8, 2010.“Representations will then be heard at a public hearing to be held on December 15, 2010 in Colombo,” the recent notice issued by the commission stated. Lokuhetty, meanwhile, commended the government for its decision to amalgamate the three tourism bodies, Sri Lanka Tourism Development Authority (SLTDA), Sri Lanka Tourism Promotion Bureau (SLTPB) and Sri Lanka Convention Bureau and at the same time leaving the Sri Lanka Institute of Tourism and Hotel Management (SLITHM) as a single agency to promote tourism.
“This is good because it will leave aside the complications involved with too many bosses and steer the ministry to one direction to achieve a common goal,” Lokuhetty said.
The government has announced that a new legislation will be introduced in this regard during the first 100 days of 2011 to enable this amendment.
Sri Lanka has targeted to achieve tourist arrivals of 2.5 billion by 2016.
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Poultry group denies shortage

Imports of chicken and eggs will hit farmers, says association

The All Island Poultry Association (AIPA) has criticised the government’s recent decision to import 2,000 tonnes of chicken and 50 million eggs, a move which they opine as ‘hasty’ and one that could badly hit the local poultry industry.

According to All Island Poultry Association (AIPA) chairman Dr D D Wanasinghe, there is a monthly surplus of around 2,000 metric tonnes of chicken at present in the market proving that the shortage of chicken is a clear misconception although there is a marginal shortage of eggs.



“We are concerned that the government has hastily ordered the import of chicken and eggs into the country due to a false estimation of demand and a misconception about the available stock which is going to badly hit the survival of an estimated 75,000 local poultry farmer families and another 100,000 input suppliers,” Dr Wanasinghe told The Bottom Line.



He says his recent talks with all of the 11 ISO-certified chicken processors had revealed out that there were enough stocks of chicken to be consumed in the country and the shortage was a misapprehension by senior government authorities.

“Of the 10,000 tonnes of chicken we produce a month, the assessment of requirement is only about 8,000 tonnes a month leaving us with a clear surplus every month,” Dr Wanasinghe said adding that the government was overestimating demand to as high as 12,000 tonnes a month and was trying to kill the local industry by flooding the market with cheaper imports.

He said that although there is a price control for chicken of Rs 350 at present, it is presently even selling as low as Rs 315 a kilo, specifically in areas such Ja-ela, Wattala and Kandana, where the output was high.

“The monthly surplus in local production would be more than enough to meet higher demand during the upcoming Christmas holiday season and there is no need to import chicken,” he pointed out.

In the case of eggs, he said the association had forewarned the authorities about a possible shortage as early as July 2010 and had requested the Ministry of National Livestock and Rural Community Development to import 400,000 pullets. This request was not heeded at the time, he pointed out.

“If it was allowed at the time, we would have had the requirement of eggs by now but what I heard is now they are importing both pullets and eggs, which decision will also leave a surplus of eggs in the future,” Dr Wanasinghe outlined.

Budget

He said the 2011 Budget had not met the local poultry industry’s expectations, specifically with regard to the request towards the reduction of Value Added Tax (VAT) to a reasonable level.

“The local poultry industry didn’t get any benefit from the budget. We had requested the government to reduce the VAT to a reasonable level as consumers presently pay a VAT of Rs. 57 on every Rs. 350 a kilo of chicken. We had also asked for some duty concessions presently with regard to the transportation of the items,” he said.

Sri Lanka has decided to import upto 2,000 tonnes of chicken from India to meet shortages in the domestic market ahead of Christmas holiday season.

The government was immediately placing an order for 500 tonnes with the balance to be imported before the holiday season, trade ministry officials said.

The number of foreign holiday-makers has increased by 43.5 percent in the first 10 months of this year compared to 2009, with nearly half a million travelling to Sri Lanka to sample its beaches and wildlife.
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New strategy to promote tourism from next year

By Azhar Razak

Sri Lanka is to adopt a different tourism promotion strategy next year by focussing on key sectors during each month.

The move is in line with the year being declared as ‘Visit Sri Lanka Year’.

According to a top official, the new proposal should help the industry to attract more tourists to the island as it aims to concentrate on specific aspects of tourism each calendar month.

“We have adopted a theme for each month in 2011. The month of January will be dedicated for beaches, February for sports and activities, March – MICE, April – people and culture, May – religion tourism, June – weddings and honeymoons, July – health, August – heritage, September – wildlife, October – community (agriculture and fishing), November – culinary and December – shopping and entertainment,” Sri Lanka Tourism (SLT) chairman Dr Nalaka Godahewa told The Bottom Line.

To keep these themes alive, he said SLT had planned to concentrate on various events that will happen right throughout the year.

According to industry officials, in January, SLT will promote beaches at the season’s peak, in February - the ICC World Cup 2011, in March - organising of UNWTO regional commission meeting in Sri Lanka, in July - an Ayurvedic exhibition to be held, in August - the Esela Perahera and related events, in September, the Minneriya elephant gathering, in October, SLT will encourage the nine provinces to come up with a minimum of nine tourism villages focussing on their strengths, in November - the World Spice Festival is set to take place, and in December a large scale shopping festival will take place.

Dr Godahewa said Sri Lanka is fast emerging as a tourism hotspot as travel advisories are now favourable and more airlines have scheduled flights into Colombo.

“We have also sorted out the administrative issues specifically with regard to delays that used to happen in project approvals in relation to the industry by setting up a ‘one stop shop’ service which now fast tracks most applications,” he said.

When asked what the tourist arrivals target would be for the year 2011, Godahewa said the board had not yet set a specific target for the year alone but were working on the longer term target of attracting 2.5 million visitors by the year 2016.

Sri Lanka’s total arrivals from January 2010 to October this year has shot up by 43.5 percent to 497,598 from a year earlier with tourist arrivals in October 2010 increasing by 39.4 percent to 52,370 visitors from a year ago.

Earnings from tourism have also jumped by 62 percent in the first 10 months of this year to a record $437.9 million, the Central Bank’s latest data showed.
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Diana Group plans IPO

Diana Group, manufacturers of biscuits and chocolates based in Matale, has plans to go for an Initial Public Offering, probably in the latter part of 2011with a view to expanding its business and possibly venturing into export business.

According to a senior official of the firm, the group is presently receiving a lot of interest from foreigners who are encouraging the firm to venture into exports.



“We will be going for an IPO possibly in a year’s time and this will be to raise funds for further expansion and venture into exports,” Upendra Jayasekara, general manager – operations, told The Bottom Line.

In the meantime, Diana Group, which recently disposed its sister company, Diana Biscuits Manufacturers Pvt Ltd to Cargills Ceylon Plc for Rs 350 million, has plans to utlise the proceeds to set up a new wafer plant.

“We are looking to set up another new wafer plant to manufacture wafer biscuits. However, we have not identified a specific location yet,” Jayasekara said.

When asked what would happen to the ‘Helen’ brand of biscuits which Cargills had acquired, he said Cargills would rename the biscuit with a new brand once the existing stock was sold out and the brand would not be used anymore.

The Diana Group now comprises Diana Trading and Diana Chocolate, which produces Diana biscuits and Diana chocolates.
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Tuesday, December 7, 2010

Colombo City Development Plan

Full text of the Sujata Jayawardena memorial speech delivered by Secretary Defence Mr. Gotabaya Rajapaksa at the Sri Lankan Foundation Institute.


I am grateful to the Alumni Association of the University of Colombo for having invited me to deliver this year's Sujata Jayawardena Memorial Oration. I am well aware of the service rendered to the University by Mrs. Jayawardena. In addition to her many contributions to the arts and her outstanding work on behalf of many charities, she is warmly remembered for her efforts to develop a closer relationship between the University, its undergraduates and its alumni.


Mrs. Jayawardena's successful campaign to build a hostel for women undergraduates at Bullers Lane was her crowning achievement as past President of the Alumni Association. This complex, which houses over five hundred women from all around Sri Lanka while they study at Colombo University, stands as a proud memorial to this distinguished and generous alumna. I am deeply conscious, as I begin today's oration, of its similar significance.
I am also deeply conscious that the topic of this oration is of deep interest to most of us here today. Colombo is a city we are deeply connected to. It has most of the best educational institutions, hospitals, residential facilities and tourist facilities. The central administrative units of the Government are also located within the Greater Colombo Area. For these reasons it is safe to say that nearly every Sri Lankan has had or someday will have a link to this city. That is why I approach this oration on the Development Plans for the City of Colombo with a great sense of responsibility.
Historical Context
Colombo is a historic city, known in the ancient world for being a gateway to Sri Lanka. It was visited by Fa-hsien, who came to Sri Lanka in the fourth century, and it is mentioned in the fourteenth century writings of Ibn-Batuta.
From the sixteenth century onwards it was one of the centres of colonial activity. The Portuguese established a trading post in 1505 and built the Fort in 1518. For almost a century and a half it was their stronghold, until the Dutch captured it in 1656. A hundred and forty years later, the British took over Colombo. After the fall of Kandy in 1815, they made it the capital of the crown colony of Ceylon.
The development of Colombo as a commercial and residential hub owes a lot to the British. Unlike the Portuguese and the Dutch, who viewed it mostly as a military fort and trading post, the British set about making Colombo a proper city. They set up the Colombo Municipal Council in 1865 and undertook the developments that turned the harbour into one of the great ports in the region. The first formal development plans for the city were also made during British rule.
The 1921 city plan by Sir Patrick Geddes provided for expansions to the port, the setting up of parks and the zoological garden. It paved the way for the further development of internal roads, including present day R. A. de Mel Mawatha (Duplication Road), which was created as a relief road to Galle road. Although the 1921 plan was not fully carried out, it contained important proposals that have helped shape the city's present identity.
The 1940 Development Plan and Town Planning Ordinance established outline plans for the municipal area and regulations for its development. However, due to financial constraints, the plan was not fully implemented. This non-implementation of plans for the city is a recurring theme in its history.
After independence, the 1949 plan by Patrick Abercrombie outlined the development of Ragama, Homagama and Ratmalana as satellite towns that would help decentralise urban activities in the region. The plan included a ring road to link these towns and the shifting of central administrative functions to Ratmalana. This principle of decentralisation has been one of the driving thrusts of Colombo's development plans ever since. Unfortunately, it has not yet been properly realised.
Several other plans followed, in 1978, 1985, 1998, and during the last decade. None of these were fully implemented. These half-implemented plans for Colombo contributed to creating the large, improperly organised city we know today. Future plans for the city's development must be viewed within the context of this history.
Future Development Thrust
Another context for these plans is the overall development agenda of Sri Lanka. The driving thrust of the medium term plan is to double, per capita income from US$2,000 to US$4,000 within a period of five years. The recent Budget Speech delivered by His Excellency the President outlined several measures needed to achieve this target, including ambitious plans to increase foreign and local investment, promote tourism, improve the national infrastructure, enhance land utilisation and encourage village centred growth.
While these plans are vital for encouraging regional development, it must be understood that cities are the driving force of economic growth today. Cities serve as a focal point for commercial activities, investment, and the provision of administrative and social services. That is why, alongside its wide-reaching plans for encouraging regional growth, the Government also has comprehensive plans for the improvement of Colombo.
These plans are centred on creating further scope for business activities, residential facilities and the provision of services. These will all cater to present and future opportunities that Colombo can exploit. This city should not simply be the focal point for localised economic activity but should also tap international opportunities. The city can easily attract more tourists as well as foreign investment in a number of areas.
With the emergence of a large middle class in India numbering roughly 500 million, there are many opportunities for Colombo to position itself as a preferred destination for business, shopping and vacations. Colombo will also be the gateway for religious pilgrimages and tours in the rest of the country for these visitors, whose culture has deep historic links with ours. Another area in which Colombo has great potential is the provision of conference and convention facilities for international events.
With the country's abundance of educated, qualified and English speaking workers, there is also potential to further develop Colombo as a destination for business process off-shoring. Yet another area in which Colombo can benefit is through the setting up of international educational institutions that will provide affordable but high quality education to foreign students.
In order to tap these opportunities and realise its true potential, there are several aspects of Colombo that need further improvement. These include increasing hotel capacity, particularly in terms of luxury accommodation for high spending tourists; developing overall IT infrastructure to encourage foreign companies to send their operations here; providing more residential facilities for high net-worth individuals and providing quality housing for middle-income segments.
Most importantly of all, Colombo needs to enhance its image as a preferred destination for international business and tourism, as well as a very comfortable city for all its residents. There is a need to create more public outdoor recreation spaces, with mini parks and community parks for residential areas and larger public parks within the city. There should also be more greenery on the side of the streets. Through these improvements, we will be able to create a clean, green, attractive city that will be the centre of a resurgent Sri Lanka. How we can achieve this must be viewed from the context of what present-day Colombo is.
Colombo Today Colombo today is a large metropolis with a population of over 650,000. On a daily basis, hundreds of thousands more commute to the city from the surrounding regions for work and education, and to obtain commercial and administrative services. In terms of the facilities and services available as well as the general infrastructure, Colombo is the most developed city in the country.
For this reason, it is the centre of a lot of economic activity. It is the axis of the Western Province, which contributes more than 50% of national Gross Domestic Product, contains about 37,000 industrial production units, employs over half a million people and generates more than half a trillion rupees in value added services. As the focal point of all this activity, Colombo is not just the most economically important city in Sri Lanka; it is the engine room of the country's economy.
And yet there are so many problems that have long beset Colombo. These problems stem from a number of factors including the lack of political will to reduce overdependence on the city, regulatory confusion, poor funding, administrative inefficiency, and short-term planning. As a result, despite all the positive things one can say about Colombo, the following is also true: the city is badly congested, has been poorly regulated, has overburdened infrastructure, lacks affordable housing, and suffers from generally poor land allocation and utilisation.
There are many symptoms of these problems. The poor application of regulations has resulted in large numbers of unauthorised buildings that congest the streets, block the waterways and disfigure the city. The recent flooding in Colombo is partly due to these structures. Underserved settlements in Colombo-slums and shanties-house some 70,000 families. This is over half the population of the metropolitan area. Due to poor land allocation and poor real estate development, there is little affordable housing for the middle class. This has pushed residential growth outwards, resulting in heavy traffic congestion at commute times.
Apart from these inherited structural issues, there are many other less complex problems that have prevented the fulfilment of Colombo's potential. These include the lack of improvements to the drainage system, which is the other cause of the recent floods; the lack of a proper waste management system; the lack of a conscious effort to beautify the city; and the general lack of discipline in the use of public spaces.
Current Development Plans
Having discussed the opportunities Colombo needs to target, and the difficulties it needs to overcome, I would like to outline the measures that have recently been taken to address them.
The Development of Community Housing
The most pressing problem in Colombo today involves the slums and shantytowns that house so much of its population. The people in these underserved settlements live in terrible conditions with few of the facilities most of us take for granted. The quality of their housing is extremely poor. They lack uniform access to proper sanitation and pipe borne water. The electricity they use is often tapped illegally and poses a significant fire hazard. Their houses are concentrated within an extremely small area and they have virtually no privacy.
Nevertheless, due to the economic dominance of the Greater Colombo Area, the people in these settlements provide an essential labour pool for the activities in the city. Because of this, it is necessary to relocate them to better housing facilities within Colombo rather than look to shifting them outside. In this regard, the Government has taken action to construct high-rise community housing within the metropolitan area to accommodate these people. The improved facilities they will receive should lead to the upgrading of their quality of life.
Relocation projects for underserved settlements have been tried in the past. The Sahassapura complex in Dematagoda was set up eight years ago, while the complex at Gunasinghapura was set up even earlier. These projects were generally successful in improving the quality of housing and rationalising the use of land, but there were also a few systemic weaknesses that limited the uplifting of living standards of the occupants. These included the lack of a proper funding mechanism for long-term maintenance; little effort being taken to educate the occupants and prepare them for life in a new environment; and the lack of comprehensive community facilities. These past experiences have been studied and remedies to such problems have been introduced in the projects that are currently under way.
I am pleased to note that the occupants of the 320 new housing units constructed at Dematagoda have shown that they are quite happy with the facilities they have received. The Dematagoda complex is only one of many projects that are presently under way. Another 680 units are to be built there, along with a 3,128-unit complex at Salamulla for which the foundation stone was recently laid. The Government's target is to relocate 30,000 of the 70,000 families to new community housing within the next two years. Land for these new centres has already been identified, and discussions have been held with a number of interested companies for the construction of these facilities. Several plans have already been submitted for UDA approval, and construction work is scheduled to begin shortly.
The cost of this programme is not cheap. Each new residential unit that is established will cost approximately two million rupees. Considering the number of units that need to be created, this is a very large cost to the Government. However, it is possible to fund these community housing projects through allocating the valuable land liberated through relocation for development activities.
Because the slums and shantytowns are all single storey or low-rise buildings, they occupy vast areas of land. Since the community housing to be provided will be in high-rise building complexes, a lot of Government land will be freed in Colombo, which will be earmarked for development. This liberated land can be used for tourism and residential facilities, business activities and other services. A great deal of foreign investment is also anticipated for these development projects. For these reasons, the feasibility of the project is assured.
A further benefit is that through relocations, slums and shantytowns will no longer disfigure the city. Many of these unauthorised structures are centred on strategic reservations around the public waterways and the sides of the railway tracks. In particular, our waterways are badly polluted because of the settlements on the sides of the canals. As a result, the canals require a lot more maintenance in order to function properly. Through the relocation programme, it will be a lot easier to clean up the waterways and create more public spaces including promenades, walkways, cycle-paths and parks around the canals to enhance the city's greenery and beauty. This will create a healthier environment for the people in the city.
The most important aspect of the community housing project is the uplifting of the living standards of Colombo's low-income families. Through greatly improving their housing facilities and introducing them to a more comfortable way of life, we will be able to provide these people with the domestic environment they need to achieve social mobility. This is the greatest contribution of the relocation programme to the people of Colombo.
Another area being looked into in terms of housing is the relocation or redevelopment of run-down, legally owned structures in Colombo. This is particularly prominent in areas in Colombo North like Slave Island, Fort and Grandpass, where there are a lot of small, haphazardly scattered, private houses that should be upgraded. Unlike the slums and shantytowns, these buildings are not unauthorised structures. As a result, the UDA is discussing the best way for their redevelopment with the owners as well as private developers. This programme is being set up as a public-private partnership that will be facilitated by the UDA. I am pleased to note that there has been a good response to this initiative so far.
The Relocation of Government Buildings Another project being implemented in parallel with the community-housing programme is the relocation of Government offices and buildings from Colombo city to Sri Jayawardenepura. As mentioned earlier, the sending out of Government buildings from Colombo to a separate administrative capital has been planned a long time. However, even though this programme was part carried out in the 1980s, there are still too many Government offices still occupying prime locations in Colombo. Many of them are located in housing intended for government servants in residential areas, which causes a lot of inconvenience to the people in the area. All of these should be shifted to the administrative capital.
As a first step towards speeding up the relocation of Government buildings, a programme is being set up to shift the offices of the Defence Ministry, Chief of Defence Staff and the Headquarters of the Armed Services to a combined office complex in Battaramulla. The Government is in the process of making arrangements to provide the lands that will be released through this relocation for the development of luxury hotels and residential facilities in the heart of Colombo. Plans have been finalised for an industry leading international hotel chain to create world-class signature developments on these lands.
Another project being expedited is the second phase of the Sethsiripaya complex. This high-rise building, once completed, will house many of the remaining Government offices in Colombo. A thirty-storey building will be constructed as the third stage of Sethsiripaya to accommodate the rest. This will finally achieve the goal of rationalising overall land use through centralising administrative functions at Sri Jayawardenepura.
Improvements to Colombo Fort In parallel to moving central administrative functions out of the city of Colombo, work is being carried out to enhance the central business district. The area around Fort is the oldest part of the city and has several historic landmarks and buildings. It is also home to the head offices of many businesses. The Fort area also has the advantage of being a sea front city. Unfortunately, due to its organic growth through the years, the full potential of this area has not been realised. That is why the Government is putting in place several measures to develop this historic part of the city.
One immediate measure is the relocation of pavement hawkers. It was realised early on that although these people carried out their business in unauthorised structures that obstructed city activities, they comprised a large group of self-employed people with a lot of entrepreneurial spirit. That is why the Government has helped these people by constructing separate central market facilities where they can continue to ply their trades. Similar initiatives have been taken to relocate pavement hawkers in Borella and Nugegoda.
Another project in progress is the relocation of certain facilities to less obtrusive sites that will not impact the city's image. The St. John's fish market is being relocated to Peliyagoda, where a modern facility has been erected. A Dubai-style Gold exchange will be built in its place in Pettah. The Manning market and the Wholesale market have also been earmarked for relocation. The central bus stand will be relocated within the vicinity and will be provided better facilities. Through these measures, the use of land in the Fort area will be rationalised. More open spaces will be introduced, and historic buildings and other landmarks will gain greater emphasis.
Other, simpler methods are also in place to beautify the Fort area and make it a much more pleasant location. The historic city centre is presently in a high security zone that allowed only limited public access until recently. This area will be opened up for businesses, restaurants, museums and other public facilities. Work is in progress to make this a shaded, pedestrian only area that will restore the historic city centre to its original beauty.
Old buildings are to be renovated and preserved so that their character can be brought out. New developments can also be situated in this area, but only in such a way as not to clash with the existing buildings. A good example of this is the creation of luxury hotel and residential facilities within historic buildings such as the Cargills Building and the Grand Orient Hotel. The idea is to modify the interior while keeping the exterior intact. Discussions are already underway with the owners of these buildings in this regard. Through all these measures, the Colombo Fort area will be repositioned as a recognised world-class historic city.
City Development Adjoining the South Harbour
While urban regeneration is the common theme of all the projects mentioned so far, the Government also intends to further develop Colombo by creating new city space. Along with the Colombo South Harbour Development project, plans are being drawn to create a new city on land reclaimed from the sea. This project will see the creation of a brand new city area nearly 400 acres in extent.
Because this reclaimed city will be planned entirely afresh, it will have all necessary infrastructure, public facilities and services from the very beginning. Nearly half of the reclaimed area will be set aside for common facilities that will promote recreational activities and tourism. These could well include open parks, water features, a sea front promenade, a marina, an open-air theatre, and even an underwater recreational facility. The other half of the city space will be dedicated for commercial and tourist developments as well as high quality residential facilities.
Transportation within this city space will be through a proper road network that will include many shaded pedestrian only zones. High quality public transport will be provided to minimise the number of vehicles in the city, and a supplementary elevated monorail system is also being considered. Because the quality of services and facilities to be provided needs to be at a very high level, a separate city council for its administration is also being considered. Once this project is completed, it will vastly enhance Colombo's image as the dynamic, modern urban centre.
Improving Services
Before Colombo reaches this status however there are several facilities and services that need to be improved and developed.
The Development of Waterways Foremost among these is the solution to the present flooding problem. This is being undertaken in several steps. First, all the unauthorised structures that blocked the drainage system are being removed. It is not only the low-income segments that have erected unauthorised structures along these reservations, but businesses, the middle-class and high-income segments as well. All of these structures are being demolished, and along with the relocation of settlements on the sides of the waterways, this will greatly improve the efficiency of the drainage system.
Further, since last year, the Sri Lanka Navy has been engaged in dredging and developing the canal system in the city. Unlike in previous years, when this work was undertaken on a section-by-section basis, this time around the dredging of the entire canal system has been undertaken. Close to 80% of the work in this regard has already been completed.
Along with the development of the canals, water retention areas within the city such as the Beira Lake are being dredged. New reservoirs are being developed in the general area of Battaramulla, which will prevent the flooding of the parliament area. The reservoir already created at Peliyagoda already proved its worth during the recent rains. These measures will improve the drainage system by providing more areas within the city for water to collect before being sent out. In addition to solving the flood problem, these measures will also help to beautify the city by creating more water spaces and open areas. Colombo should not be a concrete jungle, but a green city with a pleasing environment. By improving the quality of the water retention areas, the overall environment will be greatly enhanced.
A final additional benefit of the clearing of the waterways and improvements to the water retention areas is that there will be scope to develop more water based recreational activities. Windsurfing, sailing, water skiing and even punting or paddle boating can easily be developed. This will further increase the services available in Colombo.
Developing a Clean City
Another area that needs attention has been the collection and disposal of solid waste. The immediate problems have been rectified by regularising the collection of garbage through police supervision, and by improving the dumpsites for Colombo's garbage at Meethotamulla in Kolonnawa. It is essential that a proper system of collecting and disposing garbage will continue to be enforced. Converting the present garbage dumps into proper sanitary landfills is another project that will be prioritised.
Keeping the city clean also involves a lot of civic discipline, and this is an area in which the citizens of Colombo need to improve. Whatever attempts made to improve the garbage collection system will not be enough if people randomly dump trash on the streets. Similar disrespect can be seen in the way people paste posters at random locations, rather than on the public notice boards that have been set apart for them.
The amount of graffiti sprayed on the city walls is another eyesore caused through the indiscipline of some misguided individuals. The signboards and billboards in the city also need to be standardised and regulated better. These issues will need to be addressed through a combination of civic education and stricter enforcement if Colombo is to become a truly clean city.
Transport
Yet another area in which Colombo needs improvement is in its transportation facilities. There are several areas that need attention, including improvements to the road network, improving road discipline and the provision of alternate public transport. Several measures have been taken in the recent past to address these issues.
The road network is being enhanced through the improvements to Galle road, the completion of Marine drive, and the expansion of the one-way system. The introduction of bus lanes, the creation of more dedicated parking spaces, better facilities for pedestrian crossings including disabled crossings and overhead bridges, and stricter enforcement of road rules will help improve road discipline. Finally, with the improvements to the waterways, it has become possible to provide alternate transportation through ferry services. This is already being introduced in certain waterways through the Sri Lanka Navy.
Implementation of Zoning
One other key issue facing Colombo is that existing zoning regulations have not been properly implemented. This has created many problems in residential areas, some of which have virtually been destroyed by the setting up of commercial structures. The exising zoning regulations will be strictly implemented, while adequate warning and time will be given for the relevant businesses to relocate. Zoning rules will be strictly enforced for all new developments in future.
Long Term Solutions
The projects and measures that I have discussed so far are immediate, practical methods of transforming Colombo from its present status into a world-class city. Alongside this project-oriented approach, it will also be necessary to introduce long-term measures to prevent the causes that led to the haphazard growth of Colombo. In terms of regulation, the different sector policies that result in overlapping and contradictory laws and regulations will need to be streamlined. Responsibilities must be clearly delegated amongst the central, provincial and local bodies that regulate land allocation, utilisation, zoning and other administrative functions. Solving this problem will require some reengineering within Government.
It is very important that all the relevant agencies such as the Municipal authorities, the UDA, Water Supply & Drainage Board, land reclamation authorities, and the utilities and infrastructure development authorities work with great dedication, commitment and coordination to improve the metropolitan areas. It is also important to note that Colombo cannot be considered in isolation, but the Dehiwala-Mt. Lavinia, Kotte and Kolonnawa municipalities must all function collectively. Ultimately it is necessary to establish a single central authority to coordinate these various administration functions.
Along with this administrative streamlining, the ad-hoc planning methodologies that were observed in the past will need to give way to proper strategic planning processes that analyses available resources, conceptualises a bold vision for the future, and generates a proper integrated, dynamic structural plan for future development. It is essential that all future plans ultimately uplift the living standards and income levels of the people. Through greater consultations with all relevant stakeholders and with some capacity enhancements, it will be possible to move to a comprehensive strategic planning process that will maximise the use of resources and accelerate economic growth.
Concluding Thoughts
The development plans, projects, and policy proposals I have outlined during the course of this oration stem from the Government's sincere commitment to develop Colombo. However, if we are to be truly successful in this endeavour, the state cannot work alone.
There are many areas in which the private sector, academic institutions, civic bodies and ordinary people can contribute. These stakeholders must get involved in the planning and implementation of new initiatives. It is important that these various sectors of society are empowered to do so, and that a culture of discourse and consultation is fostered in the planning processes. Towards this end, the state agencies concerned need to reach out to society at large and encourage greater public participation in these activities. The private sector and civic bodies also need to take the initiative to generate further proposals for future developments.
As importantly, the private sector must take the lead in capitalising on the opportunities that will arise through the present and future development plans. Although as a developing economy Sri Lanka needs foreign investment to help fund future growth, it is the domestic private sector that must drive the activities that will generate prosperity. It is vital that we create domestic assets to capitalise on future growth opportunities if the foundations we lay today are to lead to a better tomorrow.
All of us desire a better Colombo; a city that is clean, green, attractive and dynamic. Let us work together and work hard to achieve this. Together, we can transform Colombo into a world-class city, globally recognized as a thriving, dynamic and attractive regional hub that is the centrepiece of 21st Century Sri Lanka: the Miracle of Asia. Let us make this vision a reality. 


Source : Defence.lk website
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Full text of the Sujata Jayawardena memorial speech delivered by Secretary Defence Mr. Gotabaya Rajapaksa at the Sri Lankan Foundation Institute.
I am grateful to the Alumni Association of the University of Colombo for having invited me to deliver this year's Sujata Jayawardena Memorial Oration. I am well aware of the service rendered to the University by Mrs. Jayawardena. In addition to her many contributions to the arts and her outstanding work on behalf of many charities, she is warmly remembered for her efforts to develop a closer relationship between the University, its undergraduates and its alumni.
Mrs. Jayawardena's successful campaign to build a hostel for women undergraduates at Bullers Lane was her crowning achievement as past President of the Alumni Association. This complex, which houses over five hundred women from all around Sri Lanka while they study at Colombo University, stands as a proud memorial to this distinguished and generous alumna. I am deeply conscious, as I begin today's oration, of its similar significance.
I am also deeply conscious that the topic of this oration is of deep interest to most of us here today. Colombo is a city we are deeply connected to. It has most of the best educational institutions, hospitals, residential facilities and tourist facilities. The central administrative units of the Government are also located within the Greater Colombo Area. For these reasons it is safe to say that nearly every Sri Lankan has had or someday will have a link to this city. That is why I approach this oration on the Development Plans for the City of Colombo with a great sense of responsibility.
Historical Context
Colombo is a historic city, known in the ancient world for being a gateway to Sri Lanka. It was visited by Fa-hsien, who came to Sri Lanka in the fourth century, and it is mentioned in the fourteenth century writings of Ibn-Batuta.
From the sixteenth century onwards it was one of the centres of colonial activity. The Portuguese established a trading post in 1505 and built the Fort in 1518. For almost a century and a half it was their stronghold, until the Dutch captured it in 1656. A hundred and forty years later, the British took over Colombo. After the fall of Kandy in 1815, they made it the capital of the crown colony of Ceylon.
The development of Colombo as a commercial and residential hub owes a lot to the British. Unlike the Portuguese and the Dutch, who viewed it mostly as a military fort and trading post, the British set about making Colombo a proper city. They set up the Colombo Municipal Council in 1865 and undertook the developments that turned the harbour into one of the great ports in the region. The first formal development plans for the city were also made during British rule.
The 1921 city plan by Sir Patrick Geddes provided for expansions to the port, the setting up of parks and the zoological garden. It paved the way for the further development of internal roads, including present day R. A. de Mel Mawatha (Duplication Road), which was created as a relief road to Galle road. Although the 1921 plan was not fully carried out, it contained important proposals that have helped shape the city's present identity.
The 1940 Development Plan and Town Planning Ordinance established outline plans for the municipal area and regulations for its development. However, due to financial constraints, the plan was not fully implemented. This non-implementation of plans for the city is a recurring theme in its history.
After independence, the 1949 plan by Patrick Abercrombie outlined the development of Ragama, Homagama and Ratmalana as satellite towns that would help decentralise urban activities in the region. The plan included a ring road to link these towns and the shifting of central administrative functions to Ratmalana. This principle of decentralisation has been one of the driving thrusts of Colombo's development plans ever since. Unfortunately, it has not yet been properly realised.
Several other plans followed, in 1978, 1985, 1998, and during the last decade. None of these were fully implemented. These half-implemented plans for Colombo contributed to creating the large, improperly organised city we know today. Future plans for the city's development must be viewed within the context of this history.
Future Development Thrust
Another context for these plans is the overall development agenda of Sri Lanka. The driving thrust of the medium term plan is to double, per capita income from US$2,000 to US$4,000 within a period of five years. The recent Budget Speech delivered by His Excellency the President outlined several measures needed to achieve this target, including ambitious plans to increase foreign and local investment, promote tourism, improve the national infrastructure, enhance land utilisation and encourage village centred growth.
While these plans are vital for encouraging regional development, it must be understood that cities are the driving force of economic growth today. Cities serve as a focal point for commercial activities, investment, and the provision of administrative and social services. That is why, alongside its wide-reaching plans for encouraging regional growth, the Government also has comprehensive plans for the improvement of Colombo.
These plans are centred on creating further scope for business activities, residential facilities and the provision of services. These will all cater to present and future opportunities that Colombo can exploit. This city should not simply be the focal point for localised economic activity but should also tap international opportunities. The city can easily attract more tourists as well as foreign investment in a number of areas.
With the emergence of a large middle class in India numbering roughly 500 million, there are many opportunities for Colombo to position itself as a preferred destination for business, shopping and vacations. Colombo will also be the gateway for religious pilgrimages and tours in the rest of the country for these visitors, whose culture has deep historic links with ours. Another area in which Colombo has great potential is the provision of conference and convention facilities for international events.
With the country's abundance of educated, qualified and English speaking workers, there is also potential to further develop Colombo as a destination for business process off-shoring. Yet another area in which Colombo can benefit is through the setting up of international educational institutions that will provide affordable but high quality education to foreign students.
In order to tap these opportunities and realise its true potential, there are several aspects of Colombo that need further improvement. These include increasing hotel capacity, particularly in terms of luxury accommodation for high spending tourists; developing overall IT infrastructure to encourage foreign companies to send their operations here; providing more residential facilities for high net-worth individuals and providing quality housing for middle-income segments.
Most importantly of all, Colombo needs to enhance its image as a preferred destination for international business and tourism, as well as a very comfortable city for all its residents. There is a need to create more public outdoor recreation spaces, with mini parks and community parks for residential areas and larger public parks within the city. There should also be more greenery on the side of the streets. Through these improvements, we will be able to create a clean, green, attractive city that will be the centre of a resurgent Sri Lanka. How we can achieve this must be viewed from the context of what present-day Colombo is.
Colombo Today Colombo today is a large metropolis with a population of over 650,000. On a daily basis, hundreds of thousands more commute to the city from the surrounding regions for work and education, and to obtain commercial and administrative services. In terms of the facilities and services available as well as the general infrastructure, Colombo is the most developed city in the country.
For this reason, it is the centre of a lot of economic activity. It is the axis of the Western Province, which contributes more than 50% of national Gross Domestic Product, contains about 37,000 industrial production units, employs over half a million people and generates more than half a trillion rupees in value added services. As the focal point of all this activity, Colombo is not just the most economically important city in Sri Lanka; it is the engine room of the country's economy.
And yet there are so many problems that have long beset Colombo. These problems stem from a number of factors including the lack of political will to reduce overdependence on the city, regulatory confusion, poor funding, administrative inefficiency, and short-term planning. As a result, despite all the positive things one can say about Colombo, the following is also true: the city is badly congested, has been poorly regulated, has overburdened infrastructure, lacks affordable housing, and suffers from generally poor land allocation and utilisation.
There are many symptoms of these problems. The poor application of regulations has resulted in large numbers of unauthorised buildings that congest the streets, block the waterways and disfigure the city. The recent flooding in Colombo is partly due to these structures. Underserved settlements in Colombo-slums and shanties-house some 70,000 families. This is over half the population of the metropolitan area. Due to poor land allocation and poor real estate development, there is little affordable housing for the middle class. This has pushed residential growth outwards, resulting in heavy traffic congestion at commute times.
Apart from these inherited structural issues, there are many other less complex problems that have prevented the fulfilment of Colombo's potential. These include the lack of improvements to the drainage system, which is the other cause of the recent floods; the lack of a proper waste management system; the lack of a conscious effort to beautify the city; and the general lack of discipline in the use of public spaces.
Current Development Plans
Having discussed the opportunities Colombo needs to target, and the difficulties it needs to overcome, I would like to outline the measures that have recently been taken to address them.
The Development of Community Housing
The most pressing problem in Colombo today involves the slums and shantytowns that house so much of its population. The people in these underserved settlements live in terrible conditions with few of the facilities most of us take for granted. The quality of their housing is extremely poor. They lack uniform access to proper sanitation and pipe borne water. The electricity they use is often tapped illegally and poses a significant fire hazard. Their houses are concentrated within an extremely small area and they have virtually no privacy.
Nevertheless, due to the economic dominance of the Greater Colombo Area, the people in these settlements provide an essential labour pool for the activities in the city. Because of this, it is necessary to relocate them to better housing facilities within Colombo rather than look to shifting them outside. In this regard, the Government has taken action to construct high-rise community housing within the metropolitan area to accommodate these people. The improved facilities they will receive should lead to the upgrading of their quality of life.
Relocation projects for underserved settlements have been tried in the past. The Sahassapura complex in Dematagoda was set up eight years ago, while the complex at Gunasinghapura was set up even earlier. These projects were generally successful in improving the quality of housing and rationalising the use of land, but there were also a few systemic weaknesses that limited the uplifting of living standards of the occupants. These included the lack of a proper funding mechanism for long-term maintenance; little effort being taken to educate the occupants and prepare them for life in a new environment; and the lack of comprehensive community facilities. These past experiences have been studied and remedies to such problems have been introduced in the projects that are currently under way.
I am pleased to note that the occupants of the 320 new housing units constructed at Dematagoda have shown that they are quite happy with the facilities they have received. The Dematagoda complex is only one of many projects that are presently under way. Another 680 units are to be built there, along with a 3,128-unit complex at Salamulla for which the foundation stone was recently laid. The Government's target is to relocate 30,000 of the 70,000 families to new community housing within the next two years. Land for these new centres has already been identified, and discussions have been held with a number of interested companies for the construction of these facilities. Several plans have already been submitted for UDA approval, and construction work is scheduled to begin shortly.
The cost of this programme is not cheap. Each new residential unit that is established will cost approximately two million rupees. Considering the number of units that need to be created, this is a very large cost to the Government. However, it is possible to fund these community housing projects through allocating the valuable land liberated through relocation for development activities.
Because the slums and shantytowns are all single storey or low-rise buildings, they occupy vast areas of land. Since the community housing to be provided will be in high-rise building complexes, a lot of Government land will be freed in Colombo, which will be earmarked for development. This liberated land can be used for tourism and residential facilities, business activities and other services. A great deal of foreign investment is also anticipated for these development projects. For these reasons, the feasibility of the project is assured.
A further benefit is that through relocations, slums and shantytowns will no longer disfigure the city. Many of these unauthorised structures are centred on strategic reservations around the public waterways and the sides of the railway tracks. In particular, our waterways are badly polluted because of the settlements on the sides of the canals. As a result, the canals require a lot more maintenance in order to function properly. Through the relocation programme, it will be a lot easier to clean up the waterways and create more public spaces including promenades, walkways, cycle-paths and parks around the canals to enhance the city's greenery and beauty. This will create a healthier environment for the people in the city.
The most important aspect of the community housing project is the uplifting of the living standards of Colombo's low-income families. Through greatly improving their housing facilities and introducing them to a more comfortable way of life, we will be able to provide these people with the domestic environment they need to achieve social mobility. This is the greatest contribution of the relocation programme to the people of Colombo.
Another area being looked into in terms of housing is the relocation or redevelopment of run-down, legally owned structures in Colombo. This is particularly prominent in areas in Colombo North like Slave Island, Fort and Grandpass, where there are a lot of small, haphazardly scattered, private houses that should be upgraded. Unlike the slums and shantytowns, these buildings are not unauthorised structures. As a result, the UDA is discussing the best way for their redevelopment with the owners as well as private developers. This programme is being set up as a public-private partnership that will be facilitated by the UDA. I am pleased to note that there has been a good response to this initiative so far.
The Relocation of Government Buildings Another project being implemented in parallel with the community-housing programme is the relocation of Government offices and buildings from Colombo city to Sri Jayawardenepura. As mentioned earlier, the sending out of Government buildings from Colombo to a separate administrative capital has been planned a long time. However, even though this programme was part carried out in the 1980s, there are still too many Government offices still occupying prime locations in Colombo. Many of them are located in housing intended for government servants in residential areas, which causes a lot of inconvenience to the people in the area. All of these should be shifted to the administrative capital.
As a first step towards speeding up the relocation of Government buildings, a programme is being set up to shift the offices of the Defence Ministry, Chief of Defence Staff and the Headquarters of the Armed Services to a combined office complex in Battaramulla. The Government is in the process of making arrangements to provide the lands that will be released through this relocation for the development of luxury hotels and residential facilities in the heart of Colombo. Plans have been finalised for an industry leading international hotel chain to create world-class signature developments on these lands.
Another project being expedited is the second phase of the Sethsiripaya complex. This high-rise building, once completed, will house many of the remaining Government offices in Colombo. A thirty-storey building will be constructed as the third stage of Sethsiripaya to accommodate the rest. This will finally achieve the goal of rationalising overall land use through centralising administrative functions at Sri Jayawardenepura.
Improvements to Colombo Fort In parallel to moving central administrative functions out of the city of Colombo, work is being carried out to enhance the central business district. The area around Fort is the oldest part of the city and has several historic landmarks and buildings. It is also home to the head offices of many businesses. The Fort area also has the advantage of being a sea front city. Unfortunately, due to its organic growth through the years, the full potential of this area has not been realised. That is why the Government is putting in place several measures to develop this historic part of the city.
One immediate measure is the relocation of pavement hawkers. It was realised early on that although these people carried out their business in unauthorised structures that obstructed city activities, they comprised a large group of self-employed people with a lot of entrepreneurial spirit. That is why the Government has helped these people by constructing separate central market facilities where they can continue to ply their trades. Similar initiatives have been taken to relocate pavement hawkers in Borella and Nugegoda.
Another project in progress is the relocation of certain facilities to less obtrusive sites that will not impact the city's image. The St. John's fish market is being relocated to Peliyagoda, where a modern facility has been erected. A Dubai-style Gold exchange will be built in its place in Pettah. The Manning market and the Wholesale market have also been earmarked for relocation. The central bus stand will be relocated within the vicinity and will be provided better facilities. Through these measures, the use of land in the Fort area will be rationalised. More open spaces will be introduced, and historic buildings and other landmarks will gain greater emphasis.
Other, simpler methods are also in place to beautify the Fort area and make it a much more pleasant location. The historic city centre is presently in a high security zone that allowed only limited public access until recently. This area will be opened up for businesses, restaurants, museums and other public facilities. Work is in progress to make this a shaded, pedestrian only area that will restore the historic city centre to its original beauty.
Old buildings are to be renovated and preserved so that their character can be brought out. New developments can also be situated in this area, but only in such a way as not to clash with the existing buildings. A good example of this is the creation of luxury hotel and residential facilities within historic buildings such as the Cargills Building and the Grand Orient Hotel. The idea is to modify the interior while keeping the exterior intact. Discussions are already underway with the owners of these buildings in this regard. Through all these measures, the Colombo Fort area will be repositioned as a recognised world-class historic city.
City Development Adjoining the South Harbour
While urban regeneration is the common theme of all the projects mentioned so far, the Government also intends to further develop Colombo by creating new city space. Along with the Colombo South Harbour Development project, plans are being drawn to create a new city on land reclaimed from the sea. This project will see the creation of a brand new city area nearly 400 acres in extent.
Because this reclaimed city will be planned entirely afresh, it will have all necessary infrastructure, public facilities and services from the very beginning. Nearly half of the reclaimed area will be set aside for common facilities that will promote recreational activities and tourism. These could well include open parks, water features, a sea front promenade, a marina, an open-air theatre, and even an underwater recreational facility. The other half of the city space will be dedicated for commercial and tourist developments as well as high quality residential facilities.
Transportation within this city space will be through a proper road network that will include many shaded pedestrian only zones. High quality public transport will be provided to minimise the number of vehicles in the city, and a supplementary elevated monorail system is also being considered. Because the quality of services and facilities to be provided needs to be at a very high level, a separate city council for its administration is also being considered. Once this project is completed, it will vastly enhance Colombo's image as the dynamic, modern urban centre.
Improving Services
Before Colombo reaches this status however there are several facilities and services that need to be improved and developed.
The Development of Waterways Foremost among these is the solution to the present flooding problem. This is being undertaken in several steps. First, all the unauthorised structures that blocked the drainage system are being removed. It is not only the low-income segments that have erected unauthorised structures along these reservations, but businesses, the middle-class and high-income segments as well. All of these structures are being demolished, and along with the relocation of settlements on the sides of the waterways, this will greatly improve the efficiency of the drainage system.
Further, since last year, the Sri Lanka Navy has been engaged in dredging and developing the canal system in the city. Unlike in previous years, when this work was undertaken on a section-by-section basis, this time around the dredging of the entire canal system has been undertaken. Close to 80% of the work in this regard has already been completed.
Along with the development of the canals, water retention areas within the city such as the Beira Lake are being dredged. New reservoirs are being developed in the general area of Battaramulla, which will prevent the flooding of the parliament area. The reservoir already created at Peliyagoda already proved its worth during the recent rains. These measures will improve the drainage system by providing more areas within the city for water to collect before being sent out. In addition to solving the flood problem, these measures will also help to beautify the city by creating more water spaces and open areas. Colombo should not be a concrete jungle, but a green city with a pleasing environment. By improving the quality of the water retention areas, the overall environment will be greatly enhanced.
A final additional benefit of the clearing of the waterways and improvements to the water retention areas is that there will be scope to develop more water based recreational activities. Windsurfing, sailing, water skiing and even punting or paddle boating can easily be developed. This will further increase the services available in Colombo.
Developing a Clean City
Another area that needs attention has been the collection and disposal of solid waste. The immediate problems have been rectified by regularising the collection of garbage through police supervision, and by improving the dumpsites for Colombo's garbage at Meethotamulla in Kolonnawa. It is essential that a proper system of collecting and disposing garbage will continue to be enforced. Converting the present garbage dumps into proper sanitary landfills is another project that will be prioritised.
Keeping the city clean also involves a lot of civic discipline, and this is an area in which the citizens of Colombo need to improve. Whatever attempts made to improve the garbage collection system will not be enough if people randomly dump trash on the streets. Similar disrespect can be seen in the way people paste posters at random locations, rather than on the public notice boards that have been set apart for them.
The amount of graffiti sprayed on the city walls is another eyesore caused through the indiscipline of some misguided individuals. The signboards and billboards in the city also need to be standardised and regulated better. These issues will need to be addressed through a combination of civic education and stricter enforcement if Colombo is to become a truly clean city.
Transport
Yet another area in which Colombo needs improvement is in its transportation facilities. There are several areas that need attention, including improvements to the road network, improving road discipline and the provision of alternate public transport. Several measures have been taken in the recent past to address these issues.
The road network is being enhanced through the improvements to Galle road, the completion of Marine drive, and the expansion of the one-way system. The introduction of bus lanes, the creation of more dedicated parking spaces, better facilities for pedestrian crossings including disabled crossings and overhead bridges, and stricter enforcement of road rules will help improve road discipline. Finally, with the improvements to the waterways, it has become possible to provide alternate transportation through ferry services. This is already being introduced in certain waterways through the Sri Lanka Navy.
Implementation of Zoning
One other key issue facing Colombo is that existing zoning regulations have not been properly implemented. This has created many problems in residential areas, some of which have virtually been destroyed by the setting up of commercial structures. The exising zoning regulations will be strictly implemented, while adequate warning and time will be given for the relevant businesses to relocate. Zoning rules will be strictly enforced for all new developments in future.
Long Term Solutions
The projects and measures that I have discussed so far are immediate, practical methods of transforming Colombo from its present status into a world-class city. Alongside this project-oriented approach, it will also be necessary to introduce long-term measures to prevent the causes that led to the haphazard growth of Colombo. In terms of regulation, the different sector policies that result in overlapping and contradictory laws and regulations will need to be streamlined. Responsibilities must be clearly delegated amongst the central, provincial and local bodies that regulate land allocation, utilisation, zoning and other administrative functions. Solving this problem will require some reengineering within Government.
It is very important that all the relevant agencies such as the Municipal authorities, the UDA, Water Supply & Drainage Board, land reclamation authorities, and the utilities and infrastructure development authorities work with great dedication, commitment and coordination to improve the metropolitan areas. It is also important to note that Colombo cannot be considered in isolation, but the Dehiwala-Mt. Lavinia, Kotte and Kolonnawa municipalities must all function collectively. Ultimately it is necessary to establish a single central authority to coordinate these various administration functions.
Along with this administrative streamlining, the ad-hoc planning methodologies that were observed in the past will need to give way to proper strategic planning processes that analyses available resources, conceptualises a bold vision for the future, and generates a proper integrated, dynamic structural plan for future development. It is essential that all future plans ultimately uplift the living standards and income levels of the people. Through greater consultations with all relevant stakeholders and with some capacity enhancements, it will be possible to move to a comprehensive strategic planning process that will maximise the use of resources and accelerate economic growth.
Concluding Thoughts
The development plans, projects, and policy proposals I have outlined during the course of this oration stem from the Government's sincere commitment to develop Colombo. However, if we are to be truly successful in this endeavour, the state cannot work alone.
There are many areas in which the private sector, academic institutions, civic bodies and ordinary people can contribute. These stakeholders must get involved in the planning and implementation of new initiatives. It is important that these various sectors of society are empowered to do so, and that a culture of discourse and consultation is fostered in the planning processes. Towards this end, the state agencies concerned need to reach out to society at large and encourage greater public participation in these activities. The private sector and civic bodies also need to take the initiative to generate further proposals for future developments.
As importantly, the private sector must take the lead in capitalising on the opportunities that will arise through the present and future development plans. Although as a developing economy Sri Lanka needs foreign investment to help fund future growth, it is the domestic private sector that must drive the activities that will generate prosperity. It is vital that we create domestic assets to capitalise on future growth opportunities if the foundations we lay today are to lead to a better tomorrow.
All of us desire a better Colombo; a city that is clean, green, attractive and dynamic. Let us work together and work hard to achieve this. Together, we can transform Colombo into a world-class city, globally recognized as a thriving, dynamic and attractive regional hub that is the centrepiece of 21st Century Sri Lanka: the Miracle of Asia. Let us make this vision a reality.
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