Jan 07, Colombo: Sri Lanka's Prime Minister Ranil Wickremesinghe accompanied by the Ambassador of China to Colombo Yi Xianliang Saturday launching the Southern Development Project inaugurated a special industrial zone in Hambantota amid protests by joint opposition politicians and Buddhist monks.
Prime Minister Wickremesinghe says the Sri Lanka - China Logistics and Industrial Zone (SLCLIZ) to be set up within the 'Ruhunu Economic Development Area' in Hambantota is launched to attract Chinese investments to establish new industries surrounding the Chinese-built Hambanthota Port in a move to create more job opportunities and ways of income for the people in the Southern areas and develop the area.
At the ceremony held this morning in Mirijjawila, the Prime Minister said the two major political parties and many other minor parties joined together to form the good governance rule in order to create better living standards for the people in the country. He said the government is committed to achieve this goal and will provide job opportunities to the youth in the island.
Under the project many factories and investments will be started in the Hambanthota and Monaragala districts. The Project will generate thousands of jobs and bring in about $5 billion in Chinese investment, the Prime Minister said.
Prime Minister Wickremesinghe said creating the special area for Chinese investors was aimed at making the debt-burdened Hambantota port viable and the idling Port and the Mattala Airport built with the Chinese loans will become profitable ventures with the success of the massive development program.
"The Hambantota port was going to sink us (Sri Lanka), but we are now trying to leverage it to create new economic activity and boost growth," Wickremesinghe said.
Chinese ambassador Yi said the zone could generate up to 100,000 jobs and benefit the residents of Hambantota as well as the rest of the island.
"In the next two to five years, if everything is OK, there will be about $5 billion of (Chinese) investments in this zone," Yi said adding that 100,000 new jobs were envisaged.
The government has been trying to renegotiate the terms of its $8-billion Chinese debt, which includes the construction costs of the Hambantota port as well as the Mattala International Airport which is used by only one airline, AFP reported.
The government has signed a framework agreement last month regarding the port with China Merchant Holdings and the Concessionary agreement is expected to be signed this month.
According to the agreement, 80 per cent of shares of the Port of Hambantota will be given to the Chinese company for USD 1.12 billion. The rest will be held by the Sri Lanka Port Authority.
The government also plan to set up a nearby industrial zone where Chinese companies will be invited to set up factories. It is also expected to immediately sign a few other agreements to commence Cement manufacturing plants, LNG Plants, Oil refineries, and Dockyards within the land extent of 1,200 acres owned by the port of Hambantota with an investment of approximately USD 4 billion.
However, the villagers and monks led by the Joint Opposition politicians are opposed to the government's initiative claiming that the government will hand over their residential and farmlands to the Chinese.
The government has assured that the land that will be given for Chinese investments is mostly uninhabited state land and only 5 percent of private land will be acquired after paying compensation to the owners.
In addition, a Special Economic Zone covering Monaragala, Embilipitiya, Matara and, Hambantota areas will also be established with the support of the Government of China. This will be implemented under three phases in a land extent of 15,000 acres. Around 2,400 factories which generate nearly 400,000 direct and indirect job opportunities, especially for the younger generation are also expected to be established in this area within six years, the government says.
Minister of Development Strategies and International Trade Malik Samarawickrema says that not only the Hambantota Port, the government would also develop the Trincomalee Port with investment from Indian and Japanese companies.