Despite being one of the smaller economies in emerging Asia at USD60bn in 2012, Sri Lanka’s infrastructure development is greater than many of its neighbours with a notable policy shift towards China and the petroleum industry may provide an extra boost, HSBC Global Research report said.
HSBC Global Research report, Bridging the Gap, authored by HSBC Global Research Asia Pacific Ronald Man, said Asia needs to invest over US$ 11 trillion in urban infrastructure.
It said Sri Lanka had sustained development since 2007, with public policy promoting infrastructure development from 2006.
"Recent policy has shifted towards trying to turn the country into a transport hub. In the process, Sri Lanka’s links with China have strengthened as more ports have been built by the Chinese. In March 2013, Sri Lanka announced that China will build the Hambantota port – set to be the country’s largest, with a price-tag of USD1.5bn.
"The petroleum industry may provide an extra boost to the country’s infrastructure. On 1 March 2013, Sri Lanka offered bids for licences on 13 blocks in the Cauvery and Mannar Basins, which have high petroleum potential. Assuming the potential of its hydrocarbons proves to be viable, the subsequent commercial production may provide a boost to demand for energy-related infrastructure facilities as well as a domestic source of oil to reduce the country’s import bill," quoting HSBC The Island reported.
As earlier reported in these pages, some of the world’s top oil exploration companies have already shown interest in Sri Lanka, especially after two encouraging discoveries by Cairn in the Mannar Basin. Total and Exxon Mobil have recently purchased Sri Lanka’s seismic data set, and ENI, BP, OVL, PVEP, and several other international majors are in discussion with the Government on potential future operations in Sri Lanka.
The final deadline for bids is September 30, 2013. Evaluation of these bids commences on October and the PRDS hopes to notify the winners then. Negotiations for the Petroleum Resources Agreements would commence thereafter in November, and the Petroleum Resources Development Secretariat hopes to sign agreements by the first quarter of 2014.