The Board of Investment (BOI) says that South East Asia's largest, fully integrated, ultra-modern tyre plant Rigid of Italy project in Horana is on and investors have not moved out.
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| Vignettes of the ground breaking ceremony of the Horana proposed Rigid tyre plant. |
The project for which the ground was broken by Prime Minister Ranil Wickremesinghe in January at the Horana Zone rolling out a blue print for a US$ 75 million investment, is tipped to be the biggest fully integrated tyre manufacturing plant in the whole of South East Asia.
This project will be creating over 3000 job opportunities, both direct and indirect.” The selected investor will be required to make a one-time payment of Rs.178 million for the 99-year lease of the 100 acre block of land at Wagawatte in Horana for the construction of a tyre factory and official from BOI said.
“We are here to encourage investors and not to drive them away and now we are re looking at this project to iron out any lose ends and see that it gets going again.”
The BOI worked out in line with the valuation of the Chief Government Valuer. The statement that the land was given for Rs 100 per acre is incorrect. In fact, the government Chief Valuer had valued the land at Rs 170,825,000 and the investor has agreed to pay the total amount upfront. Rs 10,000 will be charged as an annual nominal fee.
Development Strategies and International Trade Minister Malik Samarawickrema had earlier said that he had informed both the President and the Prime Minister about the investor of the factory well in advance.
“Furthermore, two Cabinet papers i.e. initially one proposing the land and then giving details of the incentives and other terms were submitted on the project and in addition, the project was discussed and endorsed at several meetings of the Cabinet Committee on Economic Management.
Meanwhile a spokesman for the investor said that the allocated 100 acre land at Horana, Wagawatte, an Industrial Zone is a bare undeveloped land undulating in most areas. “Based on the technical investigations it's noted we have to invest around Rs 300 to 400 million to bring the land to a usable state.”
“In addition we also have to relay a 3 million cube layer of weak soil which has to be removed throughout 25 acres of the land.”
He explained that the BOI is not providing any infrastructure facilities like in other zones. “We also have to invest on a waste disposal treatment plant and build all internal roads.
These investments would also be beneficial to other investors who would invest in the nearby area in the future. Hence we are also doing part of the work what the government should have done.”
He also said that when the popular Passikudah tourism zone was created by the previous government on an abandoned beach front area sweeping benefits, tax holidays for investors were offered. “These drove investors to the war tone and abandoned beach front and today it has over 500 rooms including four star hotels. In addition over 5,000 direct and indirect jobs were created.”
Furthermore, a land vested in BOI in Kuliyapitiya was given on a freehold basis to Western Automobile Assembly for a proposed Volkswagen vehicle assembly plant that never got off the ground. The BOI has also granted 357 acres in the same area on a 99-year lease for 1 USD per acre per annum to Merbok, in settlement of a dispute arising from a contract signed in 2000 it was reported in media.
Similar concessions were offered to a garment plant in Vavuniya where over 2,000 new employment was created.In India,in certain States land is given for one Indian rupee per acre per year to attract investors.
The (Foreign Direct investments) FDIs in 2015 was US$ 970 million and in 2016 it was around US$ 450 million, which is extremely low by any standard. The total investment for the Horana project is US$ 75 million and this kind of investments have to be egged on.
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