Thai Construction firms eyeing Sri Lanka
The Thailand Trade Representative (TTR) will support small and medium-sized Thai construction companies seeking business opportunities in Sri Lanka, which requires investments of US$23.52 billion from now until 2017.
TTR officials will join 10 to 15 Thai construction companies in Sri Lanka from Jan 19-22 as part of its effort to encourage Thai companies to become more active abroad.
Kiat Sittheeamorn, the TTR president, said Thai construction companies are highly competitive in international markets because they have decades of experience in construction technology for high-rise buildings, infrastructure, and housing with attractive designs and decorations.
However, smaller Thai companies are still weak in competing for projects abroad so they need the government to help reduce obstacles, such as providing bank guarantees.
He said Sri Lanka needed to develop infrastructure such as expressways, highways, railways, water supply systems and housing projects.
Major projects in the next six years include 569 kilometres of expressways and highways estimated to cost $18.84 billion; widening of 4,900 km of existing highways at $1.33 billion; $185 million to reduce traffic congestion; $1.27 billion for rail transport, $1.9 billion for water supply, $526 million for power plants, and the development of 890,000 housing units.
Sri Lanka also aims to increase foreign tourists to 2.5 million in 2016, resulting in rising demand for hotels to an estimated 35,000 rooms from 15,000 now. Their construction would be worth around $186 million.
Sri Lanka’s Board of Investment offers incentives to investors in small-scale infrastructure with a minimum investment of $500,000 such as house construction, tourism projects and water supply. They include zero income tax for five years, followed by a low 10% rate for two years. After that, a 20% concessionary tax will be applied for the project.
Builders of large-scale infrastructure such as expressways, highways, airports and water services costing between $12.5 million and $100 million can enjoy income tax holidays of between six and 15 years, depending on the scale of investment. This is followed by a 15% preferential tax rate. Foreign investors can buy land with conditions and can lease land for 35-50 years.