Sri Lankan Parliament Passes Colombo Port City Bill

By IndraStra Global News Team

By IndraStra Global Editorial Team


Sri Lankan Parliament Passes Colombo Port City Bill

The newly reclaimed land of 269 hectares in the heart of the Colombo Business District in Sri Lanka has been identified as a Special Economic Zone (SEZ) by the Sri Lankan Parliament, paving the way for the creation of an International Business and Multi Services hub for South Asia called the Port City Colombo


The project has been in the works for a while but this week, the Sri Lankan parliament approved the Colombo Port City Economic Commission Bill after a two-day debate on it. The Opposition parties in Sri Lanka are against the bill which they say will lead to the creation of a Chinese colony in Sri Lanka. The 225-member Sri Lankan Parliament approved the bill 148-59, according to news reports. The passing of the Bill is considered a major diplomatic and strategic concern for India, as China's access to the 9-Degree channel increases significantly. 


Slated as the 'Gateway to South Asia', the project is a Public-Private Partnership between the Government of Sri Lanka and project company CHEC Port City Colombo. Port City Colombo is situated alongside the Port of Colombo, which is ranked as the World's 18th best-connected Port and is designed to strike a virtuous balance between commercial, residential, and retail spaces.


Image Attribute: Aerial view of newly reclaimed land of Colombo Port City/ Source: FT

Image Attribute: Aerial view of newly reclaimed land of Colombo Port City/ Source: FT


According to CHEC Port City Colombo's press release, "The Colombo Port City Economic Commission Bill sets a stable policy environment and an efficient framework of administrative processes. The bill significantly enhances ease of doing business through single-window facilitation, streamlined arbitration mechanism, and globally benchmarked incentives."


The Colombo International Financial Centre Phase 1, which is the first vertical development, is scheduled to break ground in June 2021 and will comprise state-of-the-art business infrastructure with a commitment to International Green Building Standards. All registered entities can enjoy 100% foreign ownership with the opportunity to benefit from relaxed exchange control regulations within the zone. 



Yamuna Jayaratne, Director Sales and Marketing for Port City Colombo, said, "Port City will enjoy a cost advantage of nearly 80% compared with regional hubs such as Singapore and Dubai. The enactment of the Colombo Port City Economic Commission Bill will serve to enhance the ease of doing business and bring it to parity along with regional hubs and most importantly address investor pain points that currently dissuades FDI. Coupled with cost advantages, geographic location, and the quality of life on offer in Sri Lanka, this would serve as a first step in creating a compelling value proposition for investors. Port City Colombo provides an enviable physical setting required to compete with any world-class modern metropolitan city."


Sri Lanka’s Minister for Capital Markets Ajith Cabraal projected that the initial construction of the port city would bring in investment of $ 15 billion, creating over 200,000 jobs. Sri Lanka, in recent years, has carried out various development projects with an estimated $ 8-billion in loans.


China's investments in Sri Lanka hit global headlines when China Merchants Port Holdings Company Limited bought a 99-year lease on Hambantota Port for $1.2 bln. While often characterized as a debt swap, the funds from the lease were used to boost foreign currency reserves, not to restructure debt to China. China has been accused of setting a debt trap for Sri Lanka by extending infrastructure loans and then using the debt as leverage in negotiations when the debtor struggles to repay. President Rajapaksa has repeatedly denied the port deal was a debt trap.

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IndraStra Global: Sri Lankan Parliament Passes Colombo Port City Bill
Sri Lankan Parliament Passes Colombo Port City Bill
By IndraStra Global News Team
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