Port City Colombo, termed as Sri Lanka’s game changer in the economic landscape, received Parliament endorsement for the Special Economic Zone Bill, and is now overseen by a Commission appointed by the President to spearhead operations.
The Commission is chaired by Gamini Marapana PC and includes Acting Director General Saliya Wickramasuriya, Treasury Secretary S. R. Attygalle, Dr. (Eng) Priyath Bandu Wickrama, Kushan Kodithuwakku, Gerard George Ondaatjie and Rohan De Silva. It gathered for the first time earlier this month to work out the initial steps in moving the Port City operations forward and addressing the challenges ahead amid a pandemic.
The Port City Colombo was under heavy criticism in the past few months as being a threat to Sri Lanka’s sovereignty by making Sri Lanka depend on China for economic gains. Speculations was rife that the Commission could have foreigners which would serve negatively in driving forth Sri Lanka’s economic interests.
Reclaimed land
Port City Colombo is a part of China’s Belt and Road Initiative (BRI), connecting 71 countries from South-East Asia to Eastern Europe and Africa, in a global infrastructure development campaign. Even though Port City Colombo is widely considered a part of the BRI, the concept of a reclaimed land for economic activities was first originated as early as 2006 under then President Mahinda Rajapaksa during an Environmental Impact Assessment done for the Colombo Port Expansion Project, formerly known as the Colombo Port South Harbour Development. After the completion of the Colombo Port Expansion Project, the initial preparation for a reclaimed land adjoining the port was carried out in 2010. Chinese President Xi Jinping announced the ambitious BRI only in 2013 and inaugurated the Port City construction in 2014 jointly with President Mahinda Rajapaksa. Therefore, the Port City was originally a Sri Lankan born concept whereas the Chinese later saw the opportunity to invest.
Saliya Wickramasuriya was the Chairman of Sri Lanka Ports Authority during the period when Colombo Port Expansion and the reclaimed land concept initiated. He is now appointed a member and is the Acting Director General of the Colombo Port City Economic Commission.
Wickramasuriya, on behalf of the Port City Economic Commission responded to some criticism directed at the Port City project and reiterated the social and economic benefits that Sri Lanka is set to receive through this in years to come. The Commission outlined the immediate tasks of the Commission, especially with regard to attracting investors to the project.
Following are the Commission’s responses to queries:
What are the Commissioners immediate tasks?
The Commission is focusing on finalizing its legal basis, putting in place simple interim rules to handle investor queries, and establishing a formal financial management and accounting procedure. The Commission will also review and approve the existing Development Control Regulations, under which the project can be formally taken to market.
Speculations are laid to rest of the nationality of the Commissioners. However, since the model of a Special Economic Zone is new to Sri Lanka, wouldn’t it be important to obtain foreign expertise working under the Commissioners?
Yes. The needs of the project will change with time, and the Commission has short- and medium-term strategies to address them. Setting up a competent secretariat under a Director General is high on this list, and efforts are under way to finalise an initial structure and recruit internationally for this and other key roles within it. The Commission also requires guidance on drafting the various regulations required under the Act and will be looking overseas for reputed companies with relevant experience and expertise to provide it.
In a pandemic, investment dynamics have changed. The Port City was planned to be a key metropolis with suitable infrastructure for services. Will there be any changes or challenges in attracting investments?
Assuming the above are in place, the most obvious current challenge is the inability of potential investors to visit the site. The Port City project company has, over the last couple of years, built up a reasonable pipeline of interest in different developments, to which the Commission will now add its efforts on promoting specific strategic GoSL-owned blocks. In the end, though, we feel investors will need to visit before making their final decision. In the meantime, the Commission will expedite the progress of those projects already under discussion.
The Commission was criticized as being a sovereign agency that could take arbitrary decisions. What is your response?
Regulations will define the future actions of the Commission, and there will not be any ad-hoc decisions. Proposals that are already at a stage of maturity will be reviewed and approved under initial rules, as mentioned above, but there will be a clear justification for all decisions the Commission takes with regards to them.
What do you say to criticism that the Commission would fall prey to political influence?
The Commission has been instructed by the President of Sri Lanka to act without fear or favour in achieving the objectives of the project and we will do so.
Independent decisions
China Harbour Engineering Company (CHEC) the Port City Colombo (Pvt) Ltd. is the project company to finance Rs. 400 million as the initial fund for this Commission. How do you plan to take independent decisions without favouring Chinese parties when attracting investments?
The current challenge is attracting investment in the first place. All genuine proposals will be evaluated competitively on established metrics, and no preference will be given to anyone for reasons other than economic value. The initial fund advanced by the project company is refundable out of future commission revenue, and does not carry any obligations real or implied.
Investments from the China to Port City will be inevitable given China’s economic power. How do you counter local and global fears of the Chinese presence in Sri Lanka?
The Colombo Port City will actively canvass investment from across the globe, starting with the subcontinent. The Commission’s main objectives are that project timelines are met, and that Sri Lanka’s and the investors’ interests are served in terms of economic return. Investor nationality is not within the Commission’s decision framework.