Colombo: Sri Lankan growth rate has slightly dipped, it also has a draconian Non Performing Assets Bill, but these have not stood in the way of many companies betting on the country.
Construction is booming – not in the same manner as in India – but still big enough for some of the big names to have a look.
Showcasing profiles
Joining the exploration fray in the construction sector, for the past three days, were about 50 Indian companies.
They participated in the exposition showcasing their profile in building materials, construction equipment and technologies, electrical and sanitary fittings, flooring and roofing material landscaping, consultancy, property development and financial services for construction.
3-day event
The three-day event comprised exhibition, conference and buyer-seller meet.
The purpose of the event was to promote and facilitate trade and business in construction and construction materials sector, provide a platform to introduce the Indian entrepreneurs with their Sri Lankan counterparts, exchange of ideas and facilitate G2G, G2B and B2B interaction on various issues pertaining to the construction industry of both the countries.
On Lankan NPAs
The concerns for foreign investment here is a draconian law, which allows the State to take over non-performing assets if the company had availed of any concessions from the State. The other is the experience of the Indian engineering giant L&T.
Last year, L&T withdrew its country representative from Colombo following the inability of the company to begin a construction project about three years, after it was first conceived.
It decided to base the representative in Chennai, from where he can monitor developments in Sri Lanka.
L&T experience
L&T had come into Sri Lanka before the conclusion of the war with the LTTE and offered to build the biggest commercial/residential complex in the country.
The company was enthusiastically received and it even bought a chunk of land (1.33 acres) before it ran into trouble which resulted in the project being held up inordinately.
Trade up 65% y-o-y
India-Sri Lanka bilateral trade has increased by over 65 per cent last year to reach close to $5 billion, the Indian High Commissioner to Sri Lanka, Mr Ashok K. Kantha, has said.
Indian companies have invested about $150 million in Sri Lanka last year. Both countries are witnessing a boom in real estate segment and construction industry, which provides opportunities for enhanced cooperation.
He outlined the opportunities for Indian companies in Sri Lanka and vice-versa.
India Investrade 2012
Mr Kantha was speaking at the recently concluded ‘India Investrade 2012: An exposition and buyer seller meet on realty construction & construction materials,' organised here by the Indian Chamber of Commerce, Kolkata.
The event is supported by the Union Ministry of Commerce & Industry, and the Sri Lankan Ministry of Construction, Engineering Services, Housing & Common Amenities, Federation of Chambers of Commerce and Industry of Sri Lanka and The National Chamber of Commerce of Sri Lanka.
At the inauguration, Mr Basil Rajapaksa, Sri Lankan Minister of Economic Development, said that the Sri Lankan economy has been growing over eight per cent in the past two years.
He said India has achieved a lot in the construction sector and the Indian companies can play a role in the Sri Lankan market by partnering with Sri Lankan companies.
Commenting on the India-Sri Lanka Free Trade Agreement, Mr Rajapaksa said the FTA has been helpful in rapid growth of bilateral trade and invited the Indian companies to invest in Sri Lanka in sectors such as construction, tourism, education and skill development.
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