Sri Lanka to call tenders for Jaffna cement plant

Sri Lanka to call tenders for Jaffna cement plant
Published: 11 September 2008

Sri Lanka is likely to call open tenders to revive a dis-used cement plant in the Northern Jaffna peninsular instead of giving the concession through an unsolicited process, highly placed government sources said.

Sri Lanka’s construction minister Rajitha Senerathne has been promoting India’s Adithya Birla group to take-over a plant.

Jaffna has two state-controlled plants. One of them, which is less damaged, belongs to Lanka Cement, a listed firm, which is still state-controlled.

Another plant is owned by fully state-owned Sri Lanka Cement Corporation, but is severely damaged.

Both plants come under the industries ministry headed by minister Kumara Welgama.

The plants stopped production following a three decade long conflict. The plants are located in an area under government control, but land access is cut off to the Jaffna peninsular by a stretch of Tamil Tiger held territory.

Welgama has said earlier that open tenders should be called for cement making rights in Jaffna instead of giving it to one party.

Investors have been eyeing the high quality lime deposits in the peninsular for years.

Swiss cement giant Holcim, which already owns the island’s only cement factory, in the northwestern coastal area of Puttalam, has also been eyeing the Jaffna plant.

Highly placed sources say the thinking at higher levels of government now is to call tenders where all interested parties would be given a chance to bid, though defence ministry clearance to take the project forward has still not been given.

Sri Lanka’s military has been pushing into Tiger held territory on multiple front and an advancing column along the western coast could even open a land route to the peninsular.

This week the government urged aid agencies to pull out from Tamil Tiger held areas, saying their safety could not be guaranteed amidst an intensified push into guerilla held areas.