All development projects in urban areas that have already been entered into development plans of the Urban Development Authority (UDA) will be continued without any revisiting, The Sunday Morning learns.
It is also learnt that the Government expects Foreign Direct Investments (FDIs) for mega-scale development projects from China, Japan, and Korea.
Speaking to The Sunday Morning, Urban Development, Construction, and Housing Ministry Secretary Ranjith Ariyaratne said that the various mega-scale projects launched by the UDA were currently at different stages.
“Priority will be given to the projects that have already been initiated. Projects of which more than 50% of the work has been completed will be continued without any change,” he said.
When The Sunday Morning questioned about the controversial mega-scale projects launched by the previous Government, the Secretary said that Government funds would be allocated if necessary to prioritise projects, adding that Requests for Proposal (RFPs) had been called for some projects.
Further, discussions are currently underway with major donor countries such as Japan, China, and South Korea to secure funds to conduct the already planned mega-scale development projects.
Chinese development support
China continues to be Sri Lanka’s most significant development partner, investing billions in infrastructure and real estate projects across the country. One of the most prominent initiatives is the Colombo Port City, a $ 1.4 billion project under China’s Belt and Road Initiative (BRI), which is expected to transform Colombo into a major financial and business hub.
While the Government views such projects as critical to economic growth and modernisation, concerns have been raised about the long-term implications of heavy Chinese investment. Critics argue that these projects primarily serve Chinese interests rather than fostering sustainable local economic development.
President Anura Kumara Dissanayake, during his time in the Opposition, was vocal about the risks of increasing Chinese influence in Sri Lanka’s economic landscape. He has previously warned that overreliance on Chinese loans and investments could compromise national sovereignty.
“We are selling off our resources to China and this will hurt our sovereignty and future generations,” he stated, referencing the Hambantota Port, which was leased to China for 99 years after Sri Lanka struggled to meet its debt obligations. The case of Hambantota remains a key example of the potential risks associated with large-scale foreign-funded projects.
Despite these concerns, Ariyaratne defended the Government’s approach, emphasising the importance of foreign investments in driving economic progress. “Without foreign investments, many of these projects would not be possible,” he explained. “We are ensuring that Sri Lanka remains an attractive destination for investors while safeguarding national interests.”
Recently, China’s Sinopec has committed to the country’s largest-ever FDI project, marking a major milestone in economic cooperation between the two nations. The agreement, valued at $ 4.5 billion, focuses on establishing a massive refinery project in Hambantota, aimed at strengthening Sri Lanka’s energy security and boosting industrial growth.
Plans for the Western Province
The development plans for the Western Province cover various districts and key areas, aimed at driving growth and improvement.
These plans include specific focus on the Colombo District, where areas like Kesbewa, Homagama, Colombo, Beira Lake, Moratuwa, Dehiwala-Mount Lavinia, Sri Jayawardenepura Kotte, Maharagama, Kolonnawa, and Kaduwela are targeted for development.
For each of these regions, downloadable documents are available in multiple languages, including Sinhala, Tamil, and English, to ensure that the information is accessible to a broad range of communities.
Additionally, the development plans for the Gampaha and Kalutara Districts, which are also part of the Western Province, provide detailed documents on areas such as Attanagalla, Negombo, Biyagama, Kelaniya, Gampaha, Beruwala, Kalutara, and Panadura, with resources in these languages to support development initiatives.
Earlier, the authority was planning projects including developing the Colombo Fort heritage area for tourism (over 75 hectares), expanding the Colombo Central Business District (CBD) area including the Pettah Bazaar and D.R. Wijewardene Mawatha (over 650 hectares), and creating a logistics corridor from Peliyagoda to Katunayake with both local and foreign investor collaboration.
Additional UDA plans
The UDA has also entered into agreements with the private sector for 14 development projects, including residential, logistics, hospitality, public car parks, and health sectors. From January 2021 to May 2024, 22 hectares of land had been allocated, generating Rs. 11.23 billion in lease premiums, with an estimated investment value of Rs. 115 billion.
Moreover, four Memoranda of Understanding (MOUs) were signed with investors from Singapore, Japan, Canada, and China for FDI projects, proposing luxury hotels, high-end boutique hotels, an IT university, and a Japan market, with an estimated FDI income of $ 220 million and Rs. 10 billion in lease premiums.
During this period, 56 RFPs have been issued for UDA-owned land and properties, covering 90 hectares and generating an estimated lease premium of over Rs. 91 billion, with an investment value of around Rs. 440 billion.
To attract FDI, the UDA has introduced a direct land allocation method, reducing the allocation period between 4-6 months. An easy payment plan allows local real estate investors to settle lease premiums over 10 years, easing the financial burden.
The authority also plans to acquire 51 resthouses nationwide and allocate them to international hotel chains, potentially adding 500 luxury hotel rooms to the tourism industry.
The UDA has outlined a number of mega-scale development projects currently awaiting investments. These projects encompass a broad spectrum of infrastructure development, including high-rise mixed development; high-end boutique hotel development; Beira Lake waterfront development; residential development; logistics facilities and business park development; leisure, recreational, and theme park development; high-rise office complex development; tourist hotel development; and northern region development projects.
‘Projects are ongoing’
UDA Acting Deputy Director General – Project Management N.A.S.N. Nissanka told The Sunday Morning that the Treasury funds were currently being disbursed for gap-financing purposes.
“Treasury funds are mostly provided to complete projects which have already finished more than half of the construction work. No funds have been allocated to commence new projects yet,” he said.
UDA Deputy Director General – Real Estate and Land Management E.A.C. Piyashantha said the project plans had not been changed and previous plans would be continued. “Projects will be revisited periodically, but there is no decision to change the entire project plan,” he said.
When questioned about the progress of mega-scale projects, Piyashantha said that each project was at different stages at present, adding: “The projects are ongoing.”
Against such a backdrop, the UDA had put up a notice on its official website calling for suggestions to review and update Planning and Development Regulations. Accordingly, the authority has recognised the need to amend these regulations established on 8 July 2021 under Gazette Notification No. 2235/54.
This amendment aims to ensure that the regulations effectively address current and emerging challenges in urban planning and development. The UDA has invited the general public to provide comments on any proposed amendments or new proposals that could enhance the effectiveness of these regulations, with suggestions expected before the end of this month.
Significant setbacks
Meanwhile, as The Sunday Morning reliably learns, the UDA has encountered significant setbacks with 23 urban infrastructure projects funded by the Government, leading to delays in enhancing connectivity, housing, and public facilities.
Of these, 11 projects remain stalled due to inter-institutional conflicts, as a result of poor coordination between Government bodies, causing substantial financial strain. The Government allocated Rs. 56,388 million for these initiatives, with Rs. 2,531 million already spent, leaving considerable outstanding payments.
Several major projects have been directly impacted by these delays, including the nearly completed new access road from Kottawa to Mahenawatta, which has been halted due to unresolved land acquisition and coordination issues.
The Alawwa town development project, aimed at road widening and urban infrastructure improvements, has also been suspended due to disagreements between institutions. Similarly, the construction of an entrance to Yakkala from the Gampaha Highway and the expansion of the town of Imaduwa have faced delays because of bureaucratic challenges and inter-institutional disputes.
Housing and public infrastructure projects have not been immune, with delays in the construction of low-income housing units in Beruwanawatta, Eheliyagoda, and Hatton, primarily due to difficulties securing essential services like electricity and water. The modernisation of railway stations, which is crucial for improving public transport, has stalled as a result of a lack of cooperation between the UDA and the Railways Department.
One of the most high-profile setbacks is the delayed relocation of the Welikada Prison, caused by valuation and land acquisition complications.