The Board of Investment (BOI) has not rejected the proposal by Ceylon High Speed Railways Limited to set up an integrated high speed train manufacturing plant in Sri Lanka, rather, the project has only been deferred requesting further information from the investor, BOI Director General Duminda Ariyasinghe told journalists at a media briefing at the BOI on Friday.
He said there has been misconceptions and miscommunication in the media regarding the project that it has been rejected by the BOI and also the inordinate delay by the investor in furnishing the required information to proceed with the project.
“We have seen distorted reports in the media regarding the project blaming the BOI for dilly dallying on the project instead of expediting such an important project for the country. We have not delayed the approval of the project but rather have followed the due process which is required in granting approval for large scale and comprehensive projects of this nature. We will certainly go ahead with the other procedures once the investor provides the information that is lacking in the project proposal,’ Ariyasinghe said.
Ceylon High Speed Railways Limited had submitted the proposal on March 21, 2017 to set up a high speed train manufacturing plant, including seven final assembly plants and 34 factories to manufacture subsystems for the final assembly line. The projected investment under the initial phase of the project is Euro 488 million to be invested in capital goods over a period of eight years and Euro 2.2 billion to be invested by a European company as working capital.
However, the BOI soughed further information from the investors on the project on March 28, 2017, June 7 and June 13 the same year. The Screening Committee of the BOI reviewed the proposal and referred it to the Single Window Investment Appraisal Committee (SWIAC) on June 14 and SWIAC having reviewed the proposal requested comprehensive information on the track record, financial credibility of the investor, technical know-how, market plan and land utilization plan from the investor.
The resubmitted proposal was revisited by SWIAC on November 10, 2017 and having noted that the information was yet inadequate to make a decision on the project SWAIC wrote to the investor on November 14 the same year requesting for a comprehensive project proposal with details.
“Given the broad scope of the project the investor was required to furnish proper business plan with cost breakdown, project cash flow, infrastructure required, market plan, exporting countries, technology partners, the final assembly plants and the jetty,” Ariyasinghe said.
According to the proposal all raw materials for the project are to be imported from Europe and other countries.
The projected employment from the project is 24,860; 22,460 local and 2,400 foreign.
However, according Mangala Yapa, a Board member of BOI the investor had sought additional time to furnish details as information submitted on December 14, 2017 was incomplete.
“Since then there has not been any communication by the investor although it had informed the BOI that it will take two to three weeks from December 14, 2017 to submit the business plan,” Yapa said.
According to the BOI, the investor has requested 2,242 acres of outright purchase of government land and 1,823 acres of private land in six locations.
The investor has also requested 220 prime movers, 40 excavators, 600 forklifts, 75 boom trucks, 100 land vehicles, 50 buses, 400 bicycles, 1,200 water pumps, 1,500 air-conditioning units four helicopters, 22 special vehicles for families of investors, three 36-floor office buildings and 10,000 mobile phones to be bought down free of Customs duties and all other charges.
“SWIAC had followed the due process taking a wholistic approach to the project. The Committee met 31 times due to the comprehensive nature of the project. Of the 54 projects, 26 have been approved while five including this project have been deferred by the SWIAC.
Attempts to contact the investor for comment failed.