In The Press
Colombo Port City - Competing with international financial centres
The Colombo Port City (CPC) spanning 269 hectares of reclaimed land from the sea will be South Asia’s premiere residential, retail and business destination offering unmatched planned city living. The development will comprise five precincts including the financial district, central park living, island living, the marina and the international island.
When completed the Port City will have over 5.6 million square metres of built space, with the best in design and standards. Its lifestyle and business offering include world class facilities and spaces in healthcare, education, entertainment, hotels and restaurants, retail and office with an integrated resort and a marina.
According to the agreement reached between the Government and CHEC Port City Colombo, all 269 hectares of reclaimed land will be owned by the Government, with 91 acres for public use, 62 acres of commercial use and 116 acres to be leased by the UDA to CHEC Port City Colombo on a 99-year lease for further development. The country’s landmark project was opened to investors following a ceremony by Prime Minister Mahinda Rajapaksa in December 2019.
Work on the US$ 1.5 billion project resumed after renegotiating the agreement in 2016.
However, ecological concerns and demand for energy and utilities have weighed in heavily on the landmark project and environmentalist and industry experts have warned of the dire consequences of the CPC on coastal and marine life.
Professor in Economics, University of Colombo and Chairman, Monetary Policy Consultative Committee, Central Bank, Sirimal Abeyratne and Chairman, Sri Lanka National Arbitration Centre, Past President National Chamber of Commerce of Sri Lanka and a leading logistics service provider, Sujeiva Samaraweera express their views.
Strive to improve it further
Sri Lanka has distinct advantages to make the Colombo Port City (CPC) an attractive business enclave in the region due its location and the ‘time-zone’ differences between the Far East and the West and the emerging Belt and Road Initiative (BRI) of China, said Professor in Economics, University of Colombo and Chairman, Monetary Policy Consultative Committee, Central Bank, Sirimal Abeyratne.
He said the absence of a similar business enclave in the South Asian region is another reason that Sri Lanka would stand to benefit.
“All these advantages matter, but they alone will not help attract investments and transform CPC to an international business enclave. The best strategy would be to declare the CPC as a Special Economic Zone and make it better than the best in the Asian region,” Prof. Abeyratne said, adding that Sri Lanka should take a cue from Singapore and Dubai and go a step further to make it even better and exploit the advantage of a ‘late comer’ before anyone else makes it. He said Sri Lanka should not forget that there would be many international business enclaves emerging in East Asia and West Asia in the years to come posing challenges to Sri Lanka’s distinct opportunity.
“The absence of an investor-friendly tax policy, legal and regulatory framework are other major hurdles to position the Port City among investors. Our business environment needs major improvements. A way out to this is to make the CPC a Special Economic Zone, which would be entirely a different business enclave with an attractive regulatory and physical environment for business,” Prof. Abeyratne said.
As far as the tax policies are concerned, he said steps should be taken to study such environments around us. For instance, Singapore is a free port with 99 percent duty-free imports and Dubai has only five percent duty on imports and no income and corporate taxes. If we are to make CPC a competitive business enclave in the region, we need to be bold enough to compete with them. We should not think that we are the only nation which has to make such decisions. There are many other special economic zones in this region which move in that direction. This model could be replicated in other locations such as Hambantota and Trincomalee.
The human resource gap is another bottleneck that should be addressed urgently. An international business enclave is a location for ‘world-class’ businesses and services, which also need ‘world-class’ human resources.
Sri Lanka has a shortage of such ‘world-class’ human resources. We need to overcome this bottleneck by allowing business entities in the CPC to bridge the gap. It is also beneficial to improve our own human resources to world standards if there are incentives to employ both together.
Important to change people’s mindset
By Sanjeevi Jayasuriya
The Colombo Port project, when looked at from a business point of view, is of vital importance to bring economic benefits to the country, said Chairman, Sri Lanka National Arbitration Centre, Past President National Chamber of Commerce of Sri Lanka and a leading logistics service provider, Sujeiva Samaraweera.
It is necessary to upgrade facilities and services for the workers involved. The need is to give careful consideration as done in countries with similar projects such as Singapore and Korea. The 3D image of the project reflects one of international standard. With the progress of the Port City, the culture of the business community and workers will change. The project will present a scenic atmosphere.
It is important to change the mindset of the people to compete with international financial centres. As a financial centre we have the location specific advantage with wide access sea routes. The country needs to upgrade infrastructure and provide ample facilities to foreigners. We need to promote the country as a neutral venue and when it comes to arbitration, it is necessary to develop a centre of international standard.
The Port City needs to become the financial hub for Asian and SAARC countries. The country has a resource pool of people with high literacy and computer knowledge to bring world financial businesses to the Port City.
The three pillars that the country should focus on, are, change in mindset towards advanced development, building infrastructure and creating an image as a neutral venue. It is necessary to have state-of-the art equipment, telecommunication and information communication facilities.
However, with all the positive developments, the country needs to pay special emphasis during the construction process.
It is necessary to protect the environment, as the environment and business go together. Environment is not only the surroundings, but also what is derived from it such as water, energy and air. These concerns have to be on top of the line decision making to transform Sri Lanka through a circular economy where the Port City could be the catalyst.
“While appreciating some of the steps taken to build a world-class centre, we also need to introduce legislation as in other countries such as Germany which have similar projects to address issues regarding the protection of the environment. There will be a huge increase in demand for electricity and water.
“The power demand cannot be entirely supported by the national grid. A mixed energy policy is important to run this operation efficiently.
We need to understand and study the increase in demand to enable the use of modern technologies and novel building techniques. Emphasis must be paid on air and water quality and also sewerage facilities. These measures should be seriously looked at to sustain the envisaged development.
The Port City project is viable, provided due attention is paid to concerns such as environment and resource consumption.