Rs. 30 Billion Southern Highway will boost economic growth

THE Government has given priority for the fast track of the Rs. 30 Billion Southern Highway which is expected will boost GDP growth to 10%+ in the South.

The Asian Development Bank (ADB) and Japan Business Corporation (JBIC) is supporting the 'Southern Transport Development Project' estimated at a cost of Rs. 30 Billion will reduce drive time to 1 1/2 hours from the current four hours travel time between Colombo and Matara thereby driving productivity up will catalyse the economic development in the immediate influencing areas to help Sri Lanka achieve a National GDP growth of 8%.

The key is to fast track this project so that the benefits to the country can come in earlier the Director National Council For Economic Development of Sri Lanka Rohantha Athukorala said.

The budget proposal of new industries to be set up outside Colombo and Gampaha districts investing not less than Rs. 30 million in plant and machinery or building and employing not less than 200 being granted a five to ten year tax holiday.

In addition the Government granting investment relief, VAT and Customs duty exemption on the import of new machinery whilst also interest on any credit facility granted by lending institutions for such industries is also exempt from taxes will strategically fit into the benefiting the country due to the investments in infrastructure development projects like transport.

We can see the wholistic approach the government is taking to deliver the national growth target of 8%, said Athukorala.

The 128 Km long new highway will improve access from Colombo to the Southern Region and boost basic transport infrastructure, the key to catalyse rural economic development and drive GDP growth to 10%+ in the Southern Province.

The project consists of 3 sections. The Kottawa to Dodangoda section ( 67 Km) funded by JBIC is in progress with the China Harbour Engineering Company commencing work from September 8, 2005.

The second section consisting of Dodangoda to Kurundugahahetekma once again funded by JBIC, the contractor is being finalised.

The 3rd section Kurundugahahetekma to Godagama with Galle Port access funded by the Asian Development Bank (ADB), the construction is in progress under Kumagi Gumi of Japan.

The project is to be completed by 2007/8 according to V. Sivagnanasothy the Deputy Director Department of Foreign Aid and Budget Monitoring Ministry of Finance.

The Southern Highway component will have major influences on the development of the disadvantaged southern region of the country and which have a significant impact on the high level of poverty in the region.

The proportion of population below poverty line in the Southern Region will be reduced to 12% by the year 2010. It is also estimated that Gross Domestic Product (GDP) of the southern Province will increase to 10%+ in the near future.