Finance:Port City Colombo

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Port City Colombo

(Port City Colombo)
An artist’s impression of the city at Galle Face
An artist’s impression of the city at Galle Face
Port City Colombo is located in Colombo Municipality
Port City Colombo
Port City Colombo
Location in Colombo
Port City Colombo is located in Colombo District
Port City Colombo
Port City Colombo
Location in Colombo District
Port City Colombo is located in Sri Lanka
Port City Colombo
Port City Colombo
Location in Sri Lanka
Coordinates: [ ⚑ ] : 06°56′00″N 79°50′00″E / 6.9333333°N 79.8333333°E / 6.9333333; 79.8333333
CountrySri Lanka
CityColombo
Area
 • Total2.69 km2 (1.04 sq mi)
Time zoneUTC+05:30 (Sri Lanka Standard Time)
Websitewww.portcitycolombo.lk

Colombo International Financial City (Sinhala: කොළඹ ජාත්‍යන්තර මූල්‍ය නගරය, romanized: Koḷam̆ba Jātyantara Mūlya Nagaraya) is a special economic zone and International Financial Centre located in Colombo, Sri Lanka, which is currently under construction on reclaimed land adjacent to the Galle Face Green. The land reclamation work had been completed as of January 2018. In 2017, the cost was slated to be United States dollar 15 billion.[1] The project is part of China's Belt and Road initiative.[2]

In May 2021, Parliament of Sri Lanka approved Port City Commission Bill to establish the Colombo Port City Special Economic Zone and Economic Commission. Under this law, companies can be exempt from all taxes, personal, corporate, excise, import, and every other tax for 40 years.[3][4][5]

Geography

The finance city is to be constructed between the southern edge of the new Colombo South Port and the Fort Lighthouse. The total area of sea to be reclaimed is 269 ha (660 acres).[6][7]

Construction works at Portcity

Background

The Port City was claimed to be a concept of former President Mahinda Rajapaksa, who was apparently inspired while inspecting the landfill being constructed for the Colombo South port.[7][8][9] The modern Port City was in fact a fully solicited proposal submitted by China Harbour Engineering Company based on previous proposals.[10]

Construction works at Portcity

The construction was set to begin in March 2011 but due to several circumstances the project was stopped. In mid 2012, the Sri Lankan Ports Authority (SLPA) announced that the construction of the then Colombo Port City project would commence on 17 September 2014. The budget was estimated to be $15 billion.[11]

The reclamation was to be carried out by China Harbor Engineering Corporation, who has been engaged by the investor. 125 ha (310 acres) was the land was given to government as well as 88 ha (220 acres) while owned by the government was planned to be leased for 99 years to the Chinese company. 20 ha (49 acres) was planned to be given freehold to the Chinese company.[12]

Construction of the Colombo Port City project was launched on 17 September 2014 by Former Sri Lankan President Mahinda Rajapaksa and General Secretary of the Chinese Communist Party Xi Jinping.[13]

Colombo Port City (land reclamation) seen from Galle road.

The port city was suspended after the fall of the Rajapaksa government due to issues related to sovereignty of Sri Lanka and adverse environmental impacts.[14][15][16]

The Colombo International Financial City will be governed by an independent authority and will not be subjected to the Colombo Municipal Council. A special legal framework would enable it to operate on a subset of commercial law, in terms of contracts and commercial transactions with its own Special Colombo oFinancial Court serving as the court of first instance and provision of appeal to the Supreme Court of Sri Lanka. It would have its own arbitration centres.[17][18]

The building complex was approved for construction in December 2018.[19] The city will use construction resources from the Colombo Harbour Expansion Project, currently under construction near the site of this proposed city.[20]

Construction

The inauguration of the project was in 2014 with a revised plan inaugurated in October 2019.[19][21] It is projected that the water reclamation would be completed in around twenty-eight months.[21] In 2017, it was predicted that the city would be completed by 2041.[1]

Land reclamation

The port city would require around 269 hectares of reclaimed land. 116 hectares is owned by the China Communications Construction Company (CCCC), itself owned by the China Harbor Engineering Company (CHEC), and the Government of Sri Lanka has set aside another 91 hectares for public spaces.[22]

Land reclamation in November 2015

At a question and answer section in July 2018, the Prime Minister stated that the land reclamation would be finished within one year and that construction should begin by next year, and that the government seeking assistance in establishing the legal construct for the administrative area.[23] This was successfully completed in January 2019 according to the Ministry of Megapolis and Western Development.[22]

The project was around three months ahead of its targeted completion as of January 2019.[21]

Basic infrastructure

China Daily reported in April 2019 that the hydrostructural construction would be complete by the middle of 2019, with the construction of municipal facilities being completed by July 2020.[24]

The Road Development Authority had sent approval for the new road network and piling work had begun for the nine bridged by January 2019.[25]

Investments

In December 2020, Sri Lankan conglomerate LOLC Holdings signed an agreement with China Harbour Engineering for a mixed development project, with the investment value totalling $1 billion. The project includes residential, commercial and retail assets set to break ground in mid-2021. This is the first major investment in Colombo Port City.[26]

FinTech hub

Fintech Association of Sri Lanka (FASL) has launched an initiative to draft a report titled, ‘Enhancing Colombo International Financial City (Port City Colombo) as a Leading Fintech Hub in South Asia’ to submit to the President of Sri Lanka; the initiative is being assisted by a number of fintech experts globally and Professor Douglas Arner, Kerry Holdings Professor in Law at the University of Hong Kong (HKU) as the chief consultant.[27]

Criticism

Environmental

The port city has been criticised for several reasons.[9] Many environmentalists claim that the port city contains many environmental hazards and the adverse environmental impact of the project would be far greater than the economic benefits it may have to offer. The EIA report and the mitigation measures implemented by the project developers were subject to review and approval by Sri Lanka's Central Environmental Authority (CEA). [28] Maritime sector veterans also pointed out the dangers Sri Lanka may face due to giving outright ownership of land to China, especially in a high-security zone, and concerns about its effects on Sri Lanka's sovereignty have also been expressed.[29] The project was also criticized for its lack of transparency and irregularities such as the involvement of SLPA which is implementing the reclamation project, had no mandate to do so as its mandate is to deal with ports and shipping.[14][30]

Tax

Tax regime of Port City has raised concerns for money laundering. The opposition MP have accused China has "taken over as much as everything in the Port City."[31][32]

Gallery

  • Construction works at Portcity

  • Construction works at Portcity

  • Construction works at Portcity

  • Construction works at Portcity

  • Construction works at Portcity

  • Construction works at Portcity

  • Construction works at Portcity

See also

  • Sambodhi Chaithya

References

  1. ↑ 1.0 1.1 "Sri Lanka's $US15 billion "Port City Colombo" Marked for Completion in 2041" (in en). 2017-07-17. https://theurbandeveloper.com/articles/sri-lankas-us15-billion-port-city-colombo-marked-completion-2041. 
  2. ↑ Hundlani, Divya; Kannangara, Pabasara (7 May 2020). "The Belt and Road in Sri Lanka: Beyond the Debt Trap Discussion" (in en-US). https://thediplomat.com/2020/05/the-belt-and-road-in-sri-lanka-beyond-the-debt-trap-discussion/. "...the Colombo Port City project, initiated as part of China’s ambitious One Belt One Road initiative..." 
  3. ↑ "Port City Bill Red Flags: Experts Warn of Economic Zone Will be Black Money Tax Haven, Parallel Govt in Lanka". 8 April 2021. https://www.colombotelegraph.com/index.php/port-city-bill-red-flags-experts-warn-of-economic-zone-will-be-black-money-tax-haven-parallel-govt-in-lanka/. 
  4. ↑ "Second Reading of Colombo Port City Commission bill passed". Daily News. 20 May 2021. https://www.dailynews.lk/2021/05/20/local/249770/sri-lankan-majority-port-city-commission. 
  5. ↑ "Sri Lanka: Controversial 'Colombo Port City Economic Commission Act' Goes Into Effect". 2 June 2021. https://worldview.stratfor.com/situation-report/sri-lanka-controversial-colombo-port-city-economic-commission-act-goes-effect. 
  6. ↑ "Port City to attract US$ 13 bn investment from 2018". Daily Mirror. 1 April 2017. http://www.dailymirror.lk/article/Port-City-to-attract-US-bn-investment-from-company--126579.html. 
  7. ↑ 7.0 7.1 "Formula One Track To Be Built On Planned 'New Port City' Colombo". Thesundayleader.lk. http://www.thesundayleader.lk/2011/01/09/formula-one-track-to-be-built-on-planned-%E2%80%98new-port-city%E2%80%99-colombo/. 
  8. ↑ Philips, Rajan (5 December 2015). "The Megapolisation of Colombo:Is a compromise on Port City achievable?". The Island. http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=136525. 
  9. ↑ 9.0 9.1 Wijeratne, Yudhanjaya. "This is the Colombo Port City?". http://icaruswept.com/2015/03/29/this-is-the-colombo-port-city/. 
  10. ↑ "Critical Analyses of Colombo Port City Project". Daily Mirror. 16 December 2014. http://www.dailymirror.lk/63749/critical-analyses-of-colombo-port-city-project. 
  11. ↑ Gamini Gunaratna, Sri Lanka News Paper by LankaPage.com (LLC)- Latest Hot News from Sri Lanka (30 July 2012). "Construction of Sri Lanka's port city to begin later this year". Colombopage.com. http://www.colombopage.com/archive_12A/Jul30_1343633133CH.php. 
  12. ↑ "Port City developer defends itself vigorously". 22 February 2014. http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=98439. 
  13. ↑ "Colombo Port City Project Launched". News.lk. 17 September 2014. http://www.news.lk/news/business/item/2987-colombo-port-city-project-will-be-launched-today. 
  14. ↑ 14.0 14.1 "Outright land ownership to China at Port City dangerous, points out maritime sector veteran: Interview | Adaderana Biz English | Sri Lanka Business News". 16 March 2015. http://bizenglish.adaderana.lk/outright-land-ownership-to-china-at-port-city-dangerous-points-out-maritime-sector-veteran-interview/. 
  15. ↑ "Colombo Port City will be scrapped: Ranil". 16 December 2014. http://www.dailymirror.lk/59031/colombo-port-city-will-be-scrapped-ranil. 
  16. ↑ "Port city project will resume under new agreement". 31 October 2015. http://colombogazette.com/2015/10/31/port-city-project-will-resume-under-new-agreement/. 
  17. ↑ "Sri Lanka to create special economic zone law, financial court, for Port City". Economynext. https://economynext.com/sri-lanka-to-create-special-economic-zone-law-financial-court-for-port-city-11942/. 
  18. ↑ Sirimanna, Bandula. "Constitutional amendment required for Port city laws". Sunday Times. http://www.sundaytimes.lk/170827/business-times/constitutional-amendment-required-for-port-city-laws-256014.html. 
  19. ↑ 19.0 19.1 "$ 1 b Colombo financial city to kick off in Oct.". 7 September 2018. http://www.ft.lk/top-story/--1-b-Colombo-financial-city-to-kick-off-in-Oct-/26-662407. 
  20. ↑ "Tripartite agreement signed for CIFC". Daily Mirror. 12 August 2016. http://www.dailymirror.lk/114044/Tripartite-agreement-signed-for-CIFC. 
  21. ↑ 21.0 21.1 21.2 "Colombo Port City project is of great importance to us, says Chinese envoy". Business Standard India. Press Trust of India. 2019-01-16. https://www.business-standard.com/article/international/colombo-port-city-project-is-of-great-importance-to-us-says-chinese-envoy-119011600650_1.html. 
  22. ↑ 22.0 22.1 "Sri Lanka's Port City completes land reclamation". 15 January 2019. http://www.colombopage.com/archive_19A/Jan15_1547571984CH.php. 
  23. ↑ "CIFC laws before Cabinet in two months: PM" (in English). 11 July 2018. http://www.ft.lk/top-story/CIFC-laws-before-Cabinet-in-two-months--PM/26-658808. 
  24. ↑ "Belt and Road projects: Past, present, future". 22 April 2019. p. 6. https://www.chinadaily.com.cn/a/201904/22/WS5cbcf141a3104842260b7627_6.html. 
  25. ↑ "Tripartite agreements for Port City investments" (in English). 15 January 2019. http://www.ft.lk/top-story/Tripartite-agreements-for-Port-City-investments/26-670863. 
  26. ↑ "LOLC and CHEC to invest in Port City Colombo" (in en). 2020-12-25. http://www.sundayobserver.lk/2020/12/27/business/lolc-and-chec-invest-port-city-colombo. 
  27. ↑ "Colombo Int’l Financial City as top fintech hub - FASL" (in en). 2023-10-09. https://www.dailynews.lk/2023/10/09/business/159019/colombo-intl-financial-city-as-top-fintech-hub-fasl/. 
  28. ↑ Gunasekara, Skhanda (21 June 2015). "Port City Project Environmental Time Bomb? 1.4 billion US dollar investment". Ceylon Today. http://www.ceylontoday.lk/90-96104-news-detail-port-city-project-environmental-time-bomb-14-billion-us-dollar-investment.html. 
  29. ↑ "Sri Lankan Parliament Passes Colombo Port City Bill". May 28, 2021. https://www.indrastra.com/2021/05/sri-lankan-parliament-passes-colombo.html. 
  30. ↑ "Sri Lanka expresses sovereignty concerns over Chinese port city project". 16 January 2016. http://www.economynext.com/Sri_Lanka_expresses_sovereignty_concerns_over_Chinese_port_city_project-3-787-.html. 
  31. ↑ "Colombo Port City: A new Dubai or a Chinese enclave?". BBC News. 17 January 2022. https://www.bbc.com/news/world-asia-59993386. 
  32. ↑ "Colombo Port City: A Chinese White Elephant as Sri Lanka Desperately Seeks India's Help to Tide Over Economic Crisis". 28 March 2022. https://www.news18.com/news/world/colombo-port-city-a-chinese-white-elephant-as-sri-lanka-desperately-seeks-indias-help-to-tide-over-economic-crisis-4915247.html. 

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