Economic Overview

7. Fast Developing Infrastructure

The Sri Lankan government has launched an ambitious program of physical infrastructure development to completely upgrade the sea, air, road, power and telecom backbone of the country. The following are the main features of this program:

1. Sea Port and Airport Development

The Sri Lankan government has declared its intention to develop the country as a leading regional aviation, navigation and trading hub in South Asia. Therefore, the development of maritime & aviation transportation is at the forefront of the government's infrastructure development agenda. The focus of these developments is to expand the capacity and improve the efficiency of existing ports through modernization and construction of new ports and airports in strategic locations.

Major Sea Port and Airport development projects in progress:

  • Colombo South Port Expansion
    The Colombo South Port expansion project with three terminals, each terminal having capacity of 2.4 million TEUs per annum, will increase the capacity of the Colombo Port by 160% upon completion. Over 50% of the construction work of the breakwater has been completed. The first terminal, a join venture between the Sri Lankan Aitken Spence Group and China Merchant Holdings Ltd, is expected to be ready for operation in 2013.

  • Hambantota Port Development
    Phase I of the project, the Mahinda Rajapaksa Magampura Port, was inaugurated in November 2010. The port is expected initially to function as a service and industrial port and later be developed to handle transshipment cargo. Phase II of the port is underway at an estimated cost of US$ 800 Mn. The port is ideally located to serve the main East-West shipping lane connecting Europe and the Middle-east with South East Asia.

  • Expansion of Bandaranaike International Airport
    A project is under way to expand the island’s first international airport at Katunayake, 35 km north of Colombo. The project includes the expansion of the transit area, construction of new baggage-reclaim area, multi storied car park and widening of the existing runway. A feasibility study is being carried out for a second runway.

  • Development of a second International airport at Mattala
    The construction of the new international airport at Mattala in the southern Hambantota district is carried in two phases. The first phase will be completed towards end of 2012 will include one runway and a taxi way that will be expanded in the second stage to allow for larger planes, including the latest airbus A380, to land. This air port will open up the vast southern and eastern areas of Sri Lanka for development including tourism projects. The airport will be in close proximity to the Hambantota port..

2. Development of High Mobility Road Network

Road development in the country, which was left behind last few decades due to the war, has been given prominence by the government. The national Road Master Plan has already been prepared, which focuses on the construction of highways, widening of highways, reduction of traffic congestion, road maintenance & rehabilitation and bridge rehabilitation & reconstruction.

It has become an urgent necessity for further investment in road network, thus the development of road network has become a major determinant factor in attracting new investments to the country.

Major road development projects in progress;

  • Colombo - Katunayake Expressway (25km)
    The Colombo – Katunayake Expressway connects the Colombo City and the International Airport at Katunayake. It consists of four Interchanges at New Kelani Bridge, Peliyagoda, Ja-Ela and Katunayake. The Contract value of the project is US$ 292 Mn. Construction is in progress and it is expected to be completed in 2012.

  • Southern Highway (126km)
    The Southern Expressway is the longest expressway being built in Sri Lanka. The construction of a four-lane highway from Colombo to Matara will be a catalyst for the economic and social development of the Southern region and promotion of and inter-regional transport network. The highway was opened for public on 27th November 2011.

  • Outer Circular Highway (28km)
    In order to mitigate the traffic congestion in the Colombo Metropolitan area and enhance the connectivity with other regions, the 28km long Outer Circular highway (OCH) from Kottwawa to Kerawalapitiya will link seven trunk roads and the Colombo – Katunayake and the Southern Expressways.

  • Colombo - Kandy Highway (98km)
    A highway connecting Colombo with the central hill capital of Kandy is being undertaken. Field surveys have been completed and design and land acquisitions are in progress. Phase I of the project from Kadawata to Ambepussa will be constructed with the funding from ADB from 2012.

  • Katunayake - Padeniya - Anuradhapura (153km)
    The objective of the project is to improve the existing Padeniya – Anuradhapura road to provide high mobility transport between Padeniya and Anuradhapura. The project includes widening and improvement of 80.8km long Padeniya – Anuradhapura road with two lanes, and with four lanes in town areas. The total cost of the project is USD 70 million of which the Government of Korea has provided USD 55 million on concessional terms. The project commenced in May 2009 and expected to be completed in March 2012.

3. Power & Energy

Development of power & energy sector is a key aspect of the government's infrastructure development agenda and long term strategies have been introduced with active participation of the private sector, as a key component.

Major power projects in progress

Ambitions planes are under way to increase the national grid from 2817 MW to 4732 MW (by 2016) and to reduce the cost of generation by harnessing the latest clean coal technology.

  • Norochcholai Coal Power Project
    The construction of first phase of the Norochcholai Coal Power Plant (300 MW) was completed by end of 2010 and was added to the national grid by end of March 2011. The second phase will add another 600 MW to the national grid by 2014.

  • Upper Kothmale Hydro Power Project (UKHP)
    The upper Kothmale project will have an installed capacity of 150MW (consisting of two 75MW units). Construction of the project was completed and connected to the national grid on14th July 2011.

  • Trincomalee Coal Power Project
    Agreements are being finalized to develop a 2×250 MW coal power plant in Trincomalee along with associated facilities such as coal unloading jetty in Trincomalee, in collaboration with the National Thermal Power Corporation (NTPC) of India.

4. Telecommunication Infrastructure Development

  • SEA-ME-WE IV
    Sri Lanka is connected to the South East Asia-Middle East-West Europe 4 (SEA-ME-WE IV) project, the submarine cable system linking South East Asia to Europe via the Indian Sub-Continent and Middle East. The project aims to take these regions to the forefront of global communication by significantly increasing the bandwidth and global connectivity of users along its route between Singapore and France.

    SEA-ME-WE 4 fiber optics cables provide a bandwidth capacity of 1.28 terabits per second, with a 25 year guaranteed lifespan for the technology. This revolutionary submarine cable system offers Sri Lanka an immense bandwidth advantage, and paves the way to make Sri Lanka a globally competitive business hub.