10 February 2016 12:00 am Views - 1114
The critical role earmarked for joined-up public transport in Colombo’s development and what can be done to boost lending for housing were two topical issues explored by the senior figures at the Urban Development Authority (UDA) in recent interviews they gave to the global research, publishing and consulting firm Oxford Business Group (OBG).
UDA Director General (DG) Nayana Mawilmada told OBG that Sri Lanka’s inadequate public transport system was largely to blame for the huge rise witnessed in vehicle imports. The longer-term consequences of failing to address this issue, he warned, would be significant.
“The introduction of mass transit is critical. The decisions on how we incorporate a suitable public transport system, including different systematic tiers of service linked with land use under a single authority, will determine Colombo’s success or failure as a city over the next 10 years,” he said. “The same would apply to secondary cities such as Kandy.”
Mawilmada acknowledged that overhauling the current system, including Colombo’s “very fragmented” bus service, presented a formidable social challenge. “There are approximately 8,000 buses in Colombo, mostly operating as small enterprises, and studies indicate we need only around 4,000 to run efficiently,” he said.
“If we introduce mass transit, that number is likely to reduce further. The government will need to be involved in redeploying and retraining some of those bus operators.”
The full interviews with the UDA’s representatives will appear in ‘The Report: Sri Lanka 2016’, OBG’s first report on the country’s economy produced in partnership with the Board of Investments (BoI). The report will include a detailed, sector-by-sector analysis for investors, alongside contributions from leading industry representatives, including Megapolis Minister Champika Ranawaka, Sri Lanka Tea Board Chairman Rohan Pethiyagoda and Foreign Affairs Deputy Minister Harsha de Silva.
The need to make more long-term funding available for housing – a key issue for the authority – was highlighted during talks with OBG by the authority’s Chairman Ranjit Fernando. Currently, housing finance is equivalent to just 5 percent of gross domestic product (GDP).
Fernando told OBG that part of the problem stemmed from banks preferring to deal primarily in short-term funds. “A bank does not want a significant mismatch in tenors between funding and lending,” he explained.
“But housing inherently needs longer-term lending.” Redirecting funds that were being used to balance the budget to the banking sector would provide an incentive for banks to increase their lending for home purchases, he noted.
Fernando also highlighted the operational changes taking place at the authority, which included a move away from primarily state-driven construction and development towards encouraging greater private sector participation in housing and other development projects.
“The government is now focusing on releasing land, stimulating the market to build and providing incentives for development, such as tax breaks and infrastructure provision,” he said.
‘The Report: Sri Lanka 2016’ will be a vital guide to the many facets of the country, including its macroeconomics, infrastructure, banking, agriculture and other sectoral developments.