Sri Lanka port wanted by India group

Dec 14, 2011 (LBO) - An Indian conglomerate is keen to acquire a stake in ports in Sri Lanka given its location and growth potential, an investment advisor from PricewaterhouseCoopers India told an investor forum in Colombo.
Anand Dikshit of PWC India said Sri Lanka's location and post-war growth opportunities make it well placed to emerge as a logistics hub for the region.

His talks with Indian entrepreneurs indicate there is growing interest in investing in the island, Dikshit told the forum by PWC, Sri Lanka Foundation and the government's Strategic Enterprise Management Agency.

"Recently, we met the fourth largest conglomerate in India and they told us 'Give me a port in Sri Lanka and we'll buy it right now'," Dikshit said, declining to identify the firm.

"Why? Because they know Singapore port only became successful because ports around Sri Lanka were not developed. It is such an important logistics place for the world."

Dikshit said Sri Lanka will need about 15-20 billion dollars in the next few years for development of infrastructure including ports.

Manish Agrawal, also from PWC India, said massive infrastructure spending will be required given the "scorching pace the economy is expected to grow in the next five years."

Rapid infrastructure modernisation will be critical to achieve high levels of economic growth, he told the forum.

Much of the required investment in infrastructure will have to come from private sector investors, he said.
"Sri Lanka has a strategic location on the main shipping route and logistics chain," Agrawal said.
"There is a fair bit of government investment and ODA (overseas development assistance) investment already going into some ports. But there will still be opportunities for investment by the private sector in terminals."
Agrawal also said the big infrastructure investments need not necessarily come from existing large players, noting how Indian companies with no previous involvement in the sector had invested in India infrastructure and grown.
"A lot of investment actually came from domestic investors who have nothing do to with infrastructure. They had seen the opportunity and taken the risk."