In The Press

Port City Where are we now?


With the winter monsoon season over, and the spring rains just a few months away, crews at the Colombo Port City project are working around the clock.

Day and night, trucks can be seen dumping rocks along the breakwater as dredgers spray sand onto the growing landmass.

“We have to work fast while we can,” China Harbour Engineering Company (CHEC) Port City Employer’s Representative David Wang said on a site visit this week. He said reclamation work is happening on the site 24 hours a day, seven days a week.

About 63 percent of the reclamation work is now complete, according to the developer. The aim is to have all 269 hectares of new land complete by June 2019.

The total cost of this land reclamation is US$ 1.4 billion, according to company statistics.

After a rocky start marked by a year-long suspension, the Colombo Port City project’s first significant phase is finally chugging towards completion. But the vast majority of the work still lies ahead.

Moving mountains

Creating two square kilometres of land where there was once an ocean is no small task.

Wang said the final project will sit atop 70 million cubic meters of dredged sand. The sand is sucked off the seafloor by three dredgers, one of which, the Jun Yang 1, is the largest operating in Asia.

Meanwhile, ground crews are constructing a more than 3 km breakwater, made up of 3.6 million cubic meters of rock. Nine hundred meters have been completed so far, Wang said.

Three hundred six-wheelers and 38 ten-wheelers are used to transport that rock from Colombo and Gampaha area quarries every day, according to the site environmental impact assessment.

The project has been subjected to heavy criticism from environmentalists since its early days. After the new government came to power in 2015, they made the company cease work until they received a supplementary environmental impact assessment (SEIA).

But Tilak Kariyawasam, Chairman and Executive Director of the Sri Lanka Nature Group, said that the initial EIA as well as its supplement excluded much public comment from their findings.

“There were two or three committees appointed (on this issue) but we can hardly find information on this or whether they have done any monitoring activity,” he said in an interview this week.

He said that fishermen in Negombo were no longer able to catch any fish around the extraction sites. Additionally, he said others have noticed parts of the beach around Negombo eroding, and wonder if it’s connected to the dredging.

Responding to the criticisms this week, CHEC Port City Head of Strategy and Business Development Thulci Aluwihare said the company had “meaningfully engaged” with the aggrieved fishermen.

As for beach erosion, “It is scientifically proven world over that this will not result in any erosion,” he said. The SEIA report contends that dredging 3 km away from shore will not result in coastal erosion.

Under the terms of a Supplementary Environmental Impact Assessment, the dredgers must take sand from specified deposits more than 3 km away from shore, at depths below 15 metres.

Lawsuits against the project by fisherman and a nonprofit have stalled or been dismissed in court. But Kariyawasam said “we still have hope” that the environmental concerns will be heard.

A stop on the road

China Harbour and its parent company, the China Communications Construction Company, are developing multiple ports, bridges, refineries, and other infrastructure projects around the world.

These projects are part of the Chinese government’s ‘One Belt One Road’ global trade project, which aims to better connect the country to Western markets—via a land-based economic belt and a maritime silk road—through Chinese-developed infrastructure.

The Colombo Port City is somewhat unique because it’s primarily a real estate venture, Aluwihare said.

Port City’s vision is to be a financial centre for South Asia, Aluwihare said, filling the space between Dubai and Singapore.

To achieve this goal, “infrastructure is a prerequisite,” he said. “Infrastructure supported by business-friendly policies by the government is what is required for us to promote foreign direct investments, promote export of services, and ease of doing business.”

“Sri Lanka is not the only girl on the beach,” he said. “There is competition.”

International Financial Centre

The Port City project is divided into five zones or districts. There’s ‘International Island’, which is set to occupy 85 hectares at the northern end of the Port City and, upon completion, will contain a world-class hospital, international school, and resort and theme park. There’s ‘Living Island’, set to occupy 95 hectares, which will include both high-rise living quarters and low-rise beachfront villas—yes, there will be a large stretch of a manmade, swimmable, public beach—that will comprise a majority of the Port City’s projected 21,000 residential units.

Then there is the marina, set to occupy 15 hectares and accommodate between 100 and 150 yachts, and ‘Central Park’, set to occupy 55 hectares of open green space and green living quarters.

Last but assuredly not least, comes the ‘Financial District’. Set to occupy about 40 hectares, this area aims to become the beating heart of the Port City, a combination of pure office space and mixed-use (office, residential, and retail) high-rise infrastructure. Crucial to the Financial District are three plots of land at its centre, three hectares, which have been identified and designated by the government to become the ‘Colombo International Financial Centre’.

According to Aluwihare, ground will be broken for the Colombo International Financial Centre in the second half of this year. Skidmore, Owings & Merrill LLP, an American architectural firm, has been selected as the winner of an international architectural competition to design the centre.

For the Colombo International Financial Centre, and the Financial District more generally, there is an estimated accrual of at least US$ one billion of investment, split in near half between the first and second phases of construction and development.

Reversing the brain drain

Around 200,000 Sri Lankans emigrate each year, in search of employment opportunities off the island. Many of these highly educated, highly skilled emigrants leave because of a dearth of high-value jobs on the island, ones that adequately reward employees in terms of pay and career development, that are more easily found in other global international cities. This has been termed a ‘brain drain’, and much lamented in recent decades.

Aluwihare said he believed the Colombo International Financial Centre would help reverse this brain drain. According to internal estimates, the Port City project will create and sustain up to 80,000 high-value jobs, perhaps more, upon its completion in 2041.

“A CIMA graduate can make much more in the UK than what he can make here. The issue is we have a population of 20 million serving a very small market. With large MNCs setting up here, opening the gateway to South Asia, we’ll create high value jobs and not only Sri Lankans but even Sri Lankan expats may return,” he said.

“Imagine you set up an international hospital. There are so many top-notch Sri Lankans who are working overseas. With the right remuneration, they will come back to their home country.”

A hub in the Indian Ocean

For any international financial centre to thrive, certain business-friendly policies must be implemented. Aluwihare said that the government is in agreement with this, and is currently formulating what such policies might be.

Speaking to the media following an inspection of the Port City project last week, Prime Minister Ranil Wickremesinghe said that a compendium of new laws and legislative guidelines applicable to the Port City will be presented to Parliament early this year. He added that the Port City will help the country achieve its target of becoming the hub of the Indian Ocean as well as inject life into its debt-ridden economy.

According to Aluwihare, the Port City will likely obtain a special economic status, similar but not identical to the Board of Investment’s Industrial Free-Trade Zone in Katunayake, which is geared more toward manufacturing while Port City policies must be service-oriented.

In addition to granting the Port City a special economic status, Aluwihare said that immigration policies will likely also be amended for foreigners looking to live and work in the area.

“The local demand alone is not going to suffice. Our vision is building a world-class city for South Asia. How do we position ourselves in South Asia? How do we attract people to come and live here, to do business here?”

In 2016, a tripartite agreement was signed between the government of Sri Lanka, the Urban Development Authority, and CHEC Port City Colombo. The agreement stipulated that once the 269 hectares of land is fully reclaimed, the government of Sri Lanka will vest the land with a fit institution, likely the UDA. At this point, a 99-year lease will be drawn, giving temporary ownership of 116 hectares—about 43% of the Port City’s total landmass—to CHEC.

But, as Aluwihare emphasized, despite ownership of nearly half the Port City, the Chinese company and government will not be dictating policy within it. Instead, through CHEC, an estate management company will be created to “manage the estate”—mainly a maintenance of common areas and other tasks which the CMC can choose to delegate. And Sri Lankans living in the Port City will be considered full residents, and voters, of the Colombo Municipality.

Down the line

Current estimates project that the Port City will be fully constructed and operationalized by 2041. If all goes according to plan, the Port City, upon its completion, will boast a 2.8 kilometre canal, a 1.5 kilometre beach, over 90 hectares of open green space, an underground tunnel beneath Galle Face Green to decongest traffic on Marine Drive, a light rail system connecting to Kollupitiya, and more.

Of course, there are those with concerns—environmental, economic, and political. More than a few people interviewed expressed doubt that the project will benefit anyone but the upper echelon whcan attain work or afford to live in the Port City.

But Aluwihare was firm in his belief that the project, with the right mix of private and FDI investment and government-friendly policy, will benefit the entire country.

“It’s not a gated community. It’s open for all. Accessible to all,” he said. “It will be a catalyst to leapfrog for lost opportunities since the war.”