Sri Lanka Transport Sector

Sri Lanka’s strategic location at the crossroads of Asian trading routes has contributed to its growth as a regional trading hub. In 2003, the transport sector contributed 10 percent to the country’s GDP and generated about 4 percent of employment. Nonetheless, potential exists to further develop this island nation’s transport system.

Roads: Roads are the backbone of the transport sector in the country. They are vital for the movement of people and goods and play an important role in integrating the country, facilitating economic growth, and ultimately reducing poverty. National roads carry over 70 percent of the traffic in Sri Lanka. However, uncontrolled roadside development, as well as years of neglect and poor road maintenance have resulted in low travel speeds and poor service. This has discouraged long distance traffic and hindered the spread of economic activities and development in regions other than the Colombo Metropolitan Area (CMA).

Roads are extremely important for the large majority of Sri Lanka’s people who live in the villages - some 65 percent of the country’s population. They are often the only way for most rural people to reach essential services such as hospitals, schools, markets, and banks, which are mostly situated far from their villages.

Although Sri Lanka enjoys a higher road density than in many developing countries, the conditions and standards of the roads are inadequate to meet rapidly growing freight and passenger traffic. More than 50% of the natioal roads have poor or very poor surface condition and many are seriously congested. Inspite of the substantial increase in traffic volume there have been insufficient investments for construction of new highways or widening and improving existing roads. Over the past decade the investment in the road sector has been mainly concentrated on the rehabilitation of the exisitng road network.

Railways. While Sri Lanka Railways (SLR) played a dominant role in the country’s transport sector until 1928, its share in passenger and freight transportation has reduced to about 8 percent and 5 percent respectively. The railways continue to face serious competition from road transportation, and have been adversely affected by the country’s two-decade civil war. Since 1989, security threats have led to the suspension of services on the only two profitable lines: the Northern Line beyond Vavunia, and the Talaimannar Line.

Ports. Sri Lanka has several large ports such as Colombo, Galle, Trincomalee, and Kankasanthurai, as well as harbours. The Port of Colombo, the country’s premier commercial port, is one of the better performing ports in Asia. It handles both conventional cargo as well as containers, and has been acknowledged as one of the most economical ports in the region.

Challenges

To place the country on a path of economic growth, the Government of Sri Lanka (GOSL) needs to address several serious weaknesses in the country’s transport infrastructure. These are: weak institutional capacity at all levels; the inability of transport agencies to mobilize resources; and an underdeveloped private sector. These weaknesses result in the inadequate upgrading, development, and maintenance of assets, which adversely affects the quality of transport services. As a result, the sector experiences the following bottlenecks:

• Low capacity of highways and lack of expressways to connect major growth centres. National highways, which are mostly two-lane, are unable to carry the current volume of mixed traffic (pedestrians, bikes, bullock-pulled-vehicles and motor vehicles). This, together with the lack of side lanes and paved shoulders, leads to uncontrolled development of roadsides and causes low travel speeds, poor level of service, and less long-distance traffic.
  
• Severe deterioration of provincial and local roads. Neglected maintenance, as well as the lack of official capacity and resources, has led to the severe deterioration of roads. This adversely affects farmers taking produce to markets and villagers travelling to cities to reach social services.
  
  
• Traffic congestion in town centres and lack of enforcement of city road regulations. Cities suffer from slow traffic, unenforced driving and parking regulations, narrow roads, inappropriately designed junctions, and poorly marked lanes. A high percentage of buses - some 60 percent - do not meet safety standards. Urban streets are in poor condition due to flooding, blocked drains, heavy traffic, and low quality construction. The lack of drainage poses a serious threat to traffic in congested areas, affects people’s health, and hampers the development of commerce and tourism.
  
  
• Poor condition of railways and deteriorated services. The lack of maintenance funds has led to the poor condition of tracks, bridges, and railway stations. In addition, the number of locomotives is insufficient while those that are available are obsolete, and signalling and communication systems are outdated. This causes significant delays in train schedules, as well as dangerous derailments.

Key Government Initiatives

In its election manifesto (Mahinda Chintana), the Government of Sri Lanka recognizes an urgent need to invest in the improvement of its transport infrastructure to meet the country’s economic and social needs and “foster pro-poor growth and reduce regional disparities”. Priority actions are as follows:

• Upgrade international and domestic airports. The BIA-Katunayake Airport near Colombo is expected to emerge as a regional hub between Singapore and Dubai, and connect by seaplane to domestic airports to facilitate transport and tourism.
  
  
• Develop shipping and ports.The aim is to improve the competitiveness of Sri Lanka’s ports compared to those in southern India and the Persian Gulf region, and introduce the next generation of deep draught ships. The sub-sector is open for public-private partnerships and the government is eager to promote investment.
  
• Improve road infrastructure. Build a modern road network, and upgrade existing roads to meet the country’s economic and social development needs, connect poor regions and production centres to domestic and international markets, enhance road safety, and promote private sector participation in infrastructure improvement.
  

Infrastructure development is of paramount importance to meet the Government’s target of economic growth at 6 to 8 percent each year for the next five years. To this end, the medium term target is to substantially increase expenditure on transport infrastructure from 5 percent in 2004 to 7 percent of Gross Domestic Production (GDP) by 2006.

World Bank Support

From the late 1960s to the mid-1990s,the World Bank provided four loans to improve Sri Lanka’s roads and assisted in the development of sector policy. More recently, the Bank approved the largest ever investment assistance in the form of a US$100 million credit to finance the maintenance, rehabilitation and upgrading of the country’s national highways and support the government’s reform initiatives for financing sustainable road maintenance. This loan was made effective on March 2006. In addition, the Bank is supporting the Government on its review of the efficiencyof road sector expenditures.