- Mixed development venture to be built on 6.8 ha belonging to China Harbour Engineering Company
- $ 400 m in Phase One and $ 600 m in Phase Two over 8 years
- Venture to be Gazetted under Strategic Development Project Act
By Uditha Jayasinghe
Cabinet approval was given yesterday for the Port City to kick off its first investment totalling $ 1 billion for a mixed development project, which is expected to be completed in two phases within eight years, a top official said.
Co-Cabinet spokesman Dr. Ramesh Pathirana told reporters yesterday that the project had been submitted by Industrial, Exports and Investment Promotion Minister Prasanna Ranatunga and green-lighted by the Cabinet.
The Port City is made up of 269 hectares of reclaimed land, which has now been officially vested as part of Sri Lanka. Of the 269 hectares, 116 hectares belong to China Communications Construction Company (CCCC), which is the parent company of China Harbour Engineering Company (CHEC), on a 99-year lease. Of the CHEC land, 6.8 hectares will be used for the mixed development project.
“The project of $ 1 billion is proposed to be implemented in two phases. In the first phase $ 400 million will be the investment and in the second $ 600 million. We are confident that these investments will provide an overall economic boost to Sri Lanka and encourage stronger growth,” said Dr. Pathirana adding that the proposal included office space and apartments.
Cabinet approval was also given for the venture to be Gazetted under the Strategic Development Project Act so as to enable providing incentives, including tax holidays, relevant for the investment in terms of the provisions of Strategic Development Project (Amendment) Act No. 14 of 2008 and the Sri Lanka Board of Investment (Amendment) act No. 4 of L978, considering the strategic importance and magnitude of the project.
The $ 1.4 billion Port City project was kicked off during Prime Minister Mahinda Rajapaksa’s second term as President but was temporarily suspended by the previous Government when it came to power in 2015. Subsequently the project was revamped as the Colombo International Financial Centre and a fresh agreement was signed in August 2016.
In December 2017, the former Cabinet approved a proposal to sign a Memorandum of Understanding (MOU) with CHEC Port City Colombo, to develop the Colombo International Financial City building complex, valued at $ 1 billion.
According to details released by the Megapolis Ministry at the time, the building complex was to be located on 6.8 ha of land, and entail investment of approximately $ 400 million in Phase I, and a further $ 600 million in Phase II. Skidmore Owings & Merrill (SOM) of the US was awarded the design contract of the building, after being selected as the winner of a global competition to design the master plan for the development.
Dr. Pathirana was unable clarify whether this was the same project. The key difference is under the former agreement the Sri Lankan Government was to fund the construction and it was to be built on the part of the Port City belonging to the State. However, according to the latest announcement, this has now changed, and the project will be built on CHEC land instead.
Following the election of President Gotabaya Rajapaksa, the new Cabinet in December 2019 decided to review the scope of the Port City project, and appointed an eight member committee including two legal experts to look at the draft laws formulated by the former Government for the International Financial Centre. That process is still ongoing.