Sunday 19 February 2012 By Namini Wijedasa
Even as the Central Bank took urgent measures to avert a major balance-of-payments crisis, leading economists warned last week that the government must stop carrying out ‘prestige projects’ that do not bring returns.
One of the ventures they named was the Hambantota Port, but they also mentioned the Katunayake-Colombo luxury train project (suspended) and the Mattala airport (which has one of the longest runways in the world). Although it was not an infrastructure project, they also named the “extremely wasteful” bid for the 2018 Commonwealth Games.
“Thank god we didn’t win the bid because that would have been just enough for us to boom up to the next election in 2017, and then comes the payoff period,” said one economist, requesting anonymity.
Also in the pipeline are South Asia’s tallest telecommunication and entertainment tower called the ‘Lotus Tower.’
The economists agreed that government investment in infrastructure is vital in the post-war period since the private sector is hesitant to commit in those areas. They also accepted that, since Sri Lanka is now rated a lower middle income country, they are no longer eligible for the kind of ‘concessional’ aid they used to receive. Therefore, infrastructure development is funded through foreign borrowing.
“Some of the infrastructure improvements they are doing are necessary,” said another economist, also requesting anonymity.
