Emerging Colombo Port City

By Lakshman I. Keerthisinghe-2018-02-03

"Sri Lanka should implement the already signed agreements of the Port City Project and protect the legitimate rights and interests of the investors." Chinese Vice Foreign Minister Liu Zhenmin
Media reported that, Megapolis and Western Development Minister Patali Champika Ranawaka said that President Maithripala Sirisena will declare the 269 hectares of reclaimed land at Port City as a territory of Sri Lanka in March, after the necessary legal framework is passed in Parliament. After declaring Port City a landmass constitutionally and legally belonging to Sri Lanka, it will be handed over to the National Housing Development Authority (NHDA) and in turn the NHDA will lease a part of the Port City, to develop it as a Financial City, to China Harbour Engineering Company Ltd. (CHECL) on a 99-year lease. The Minister added that CHECL will launch a project in June to construct three high rises that contain 60 floors each at a cost of US$ 1 billion (Rs. 150 billion).

The special legal and administrative package that would govern financial, administrative, tax, rents and lease arrangements is being drafted by the Attorney General's Department, with the help of the Prime Minister's Office, and the draft legislation will be presented to Parliament in April. As such, the Port City will not come under the purview of the Colombo Municipal Council. Another US$ 800 million is to be invested by CHECL to develop infrastructure at the Port City that will include a huge theme park for public use, an underground tunnel from Galle Face to Kollupitiya bordering the sea along the Marine Drive to ease traffic congestion on Galle Road, a light rail system from the Port City up to Katunayake are a part of the infrastructure development programme.

Organic soil made out of solid waste of Colombo will be used for land filling at the Port City and Environment Impact Assessments (EIA) Feasibility Studies and tests for gavel, soil and pebble have also been done to ensure the strength of the ground and structures of Port City.

The Port City was a concept of former President Mahinda Rajapaksa, who was apparently inspired while inspecting the landfill being constructed for the Colombo South Port. The modern Port City was in fact an unsolicited proposal submitted by China Harbour Engineering Company based on previous proposals. The construction was set to begin in March 2011 but due to several circumstances the project was stopped. In mid 2012, the Sri Lankan Port Authority, (SLPA) announced that the construction of the then Colombo Port City project would commence on 17 September 2014. The Port City was suspended after the fall of the Rajapaksa regime due to issues related to sovereignty of Sri Lanka and adverse environmental impacts. The project was replaced with the signing of a new agreement for the Colombo International Financial Centre and several other major changes including stricter environmental restrictions were agreed on. Construction of the Colombo Port City Project was launched on 17 September 2014 by former President Mahinda Rajapaksa and the Chinese President Xi Jinping.

The Port City has been criticized for several reasons. Many environmentalists claim that the Port City contains many environmental hazards and the adverse environmental impacts the project will cause would be far more than the economic benefits it may have to offer. Maritime sector experts 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 has also been expressed. 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.

According to the agreement signed, by the previous Government, in September 2014 a land of 20 hectares will be granted to the C.H.E.C. Port City (Pvt.) Ltd on free hold basis and the remaining land is granted on 99-year lease basis. According to the consultations of the new Government, no land will be granted on free hold basis, and all the lands will be on 99-year lease basis. If the Government does not require these 20 hectares, the company may obtain the land for another 99 years.

In conclusion, an agreement has been reached with the Chinese Government that this land is being used to build a Financial City to fill the vacuum between Singapore and Dubai. This will enable offshore operations. For this purpose, the Government will propose new legislation for governing offshore activities similar to Dubai. The Financial City incorporated in the emerging Port City will be beneficial as it would make a major income earner and an employment provider for our motherland Sri Lanka.

(The writer is an Attorney-at-Law with LLB, LLM, MPhil.(Colombo) keerthisinghel@yahoo.co.uk