Colombo Port City halt costing Rs. 50 m daily loss

Thursday, 12 March 2015 01:45 -     - {{hitsCtrl.values.hits}}

The China Construction Communication Company Ltd. (CCCC), in a statement, said that all construction work on the Colombo Port City had stopped following the Sri Lankan Government’sofficial communication on 6 March - issued by the Secretary to the Ministry of Ports, Shipping and Aviation, communicating the decision by the Cabinet - to temporarily suspend ongoing work on the project with immediate effect. The Colombo Port City project, which is a 100% privately funded foreign direct investment of $ 1.4 billion by the CCCC, began construction following the signing of an agreement with the Government of Sri Lanka on 16 September 2014. As a result of this suspension, the CCCC has estimated an initial direct loss for the company of over $ 380,000 a day. Furthermore, the interest on the financial loan obtained by the company for the development of the project was being paid regardless of the ongoing suspension. Over 200 meters of the breakwater constructed thus far has been damaged due to the suspension as the company is unable to take measures to protect the reclaimed land due to the suspension.       The reconstruction of this damaged land area will be an additional cost the company will have to incur, if and when the project commences. The project employs approximately 1,000 direct personnel and a further 4,000 indirect employees, of which almost all are Sri Lankans and the sustainability of this workforce is also a concern for the company during this period. The protection of the work done on the site to date is critical and the project’s suspension restricts the company from taking adequate measures to safeguard this work, including the breakwater and landfill. Currently the company is only performing quantity surveys at the site. As a private foreign investor, the CCCC reiterated that all stipulated processes required under the project agreement were followed before the commencement of the project’s construction in 2014. CCCC, a Fortune 500 company and the world’s leading sea reclamation organisation, said it was a responsible corporate, committed to fulfilling its enterprise responsibilities through due process and diligence. Without prejudice to its legal rights, the company assures that it will continue to work with the Sri Lankan Government in providing further documentation and the information needed to review the Colombo Port City Development Project.