The Board of Investment (BOI) will discontinue the existing ownership structures for the new export processing zones (EPZs) and follow a public-private partnership (PPP) process, which will be exemplified by Rojana’s development of the Milleniya EPZ, according to the BOI head.
“Technically, the BOI managing the zones is an administrative task. Our job is to attract investment.
If we focus on that and outsource our zones, at least the new ones, that leaves a big problem out of the BOI. Secondly, it also helps the government with cash flows because the costs of developing a zone and managing it are quite high,” BOI Chairman Dumindra Ratnayaka said.
The government is required to strictly rationalize its expenditure, in order to continue the fiscal consolidation process, which began last year.
Ratnayaka said that the new model will be based on the PPP agreement being set up with Rojana, which is a Thai-Japanese joint venture that runs industrial zones
Sri Lanka will provide the land and other facilities, while the partner would develop the zone and then attract investment in collaboration with the BOI, he said.
“It’s a profit-sharing model for the Sri Lankan government. Time is now ripe for us to create these zones. So we are looking at opportunities. Similarly in Bingiriya, there are government-to-government discussions about another country coming into that zone on a PPP,” Ratnayaka added.
However, he said he could not provide more details on the Bingiriya EPZ.
The BOI currently manages 12 zones and according to Ratnayaka, 11 more are expected to be set up, including in Milleniya and Bingiriya.
In addition, Development Strategies and International Trade Minister Malik Samarawickrama recently said that the Hambantota industrial zone would have a similar ownership structure as the Hambantota port, which is described
as a PPP.
Ratnayaka said that he has biweekly meetings with National Agency for Public-Private Partnerships Chairman Thilan Wijesinghe and they are cooperating on attracting investments, which may
Ratnayaka said that the change to PPPs is occurring amid a reorientation of the BOI as an investment facilitation agency, instead of a regulator.
As part of the investment facilitation process, he said that the BOI will intervene and provide potential investors with land in the existing EPZs, if the older investors have abandoned their projects and that such intervention has already occurred about