Local boat builders in Sri Lanka said that boats being imported into the country without taxes are harming the domestic industry. Neil Fernando and Gamini Herath, both executives of the Boat Building Technology Improvement Institute Lanka (GTE) Ltd, said that domestic builders are saddled with high taxes on components used to build boats locally and that this creates an unfair price advantage for the duty-free imports.
“The reason, apparently, is that there is a severe demand for boats, especially fishing craft, but I see no justification in levying taxes on the boat components that are imported by manufacturers in Sri Lanka,” Fernando, chairman of the Institute, told The Nation. "It is unfair and causing dissatisfaction among boat builders.”
Gamini Herath, managing director of institute, said the domestic industry is lobbying through the National Chamber of Exporters against duty-free imports, but is facing an uphill fight. "Because of recession in the west, many second-hand boats are available at very low prices, like used cars," Herath said. "We're not against import of boats, but are asking for fair play and also to maintain quality standards which local manufacturers have to observe in order to access export markets."
The government expects Sri Lanka's boating industry to grow to US$1bn eventually, said Fernando. The industry had an economic impact of US$100m last year, largely with the expansion of the island nation's fishing industry.
Herath and Fernando also said that the government needed to invest in infrastructure by opening more marinas across the island. "Marinas, like airports, are an entry point to the country," said Herath. "We can't develop the local boat industry without marinas and boat parks, like vehicle parks."
Fernando said that the government is now ending restrictions on navigation imposed during the 30-year civil war that ended in 2009. But he said boatbuilders needed better access to harbours and waterways. Existing boatyards had access only to small canals, Fernando said, and that limited the size of vessels that could be built.
The press conference was a lead-in to the bi-annual Boat Show 2012, which will take place May 18-20th in Colombo. The show will include seminars on developing boating markets, investing in emerging boating infrastructure in Sri Lanka, and new technologies in FRP boat building.