News
China gets the monkey off its back with Port City luxury property deal re-start
Sri Lanka has paved the way for the continuation of the controversial Chinese-owned ocean-front luxury real estate project called Colombo Port City being built on a reclaimed offshore island the size of a small state.
In the same week that Colombo’s state media cited a Chinese official as saying that Sri Lanka has informed China the project will proceed, Finance Minister Ravi Karunanayake has told Hong Kong’s longest established English daily, the South China Morning Post, that necessary clearances have been granted. He did not specify what was granted.
The project is expected to start in February. That coincides with the dawn of The Year of The Monkey, the Chinese New Year on February 8.
But approval had been given earlier by the ousted Rajapaksa regime. Prominent figures in the current government cried wolf for months that the project was rotten, unnecessary, and wasteful and campaigned for its abolition. After much hot air, they then settled for a suspension.
Now the unsolicited, seafront luxury property project which includes a marina has got a gift from Karunanayake’s budget. He allowed tax free luxury yacht imports, while diluting subsidies for the poor.
Acknowledging that 20% live on less than US$2 a day, he professed in the budget: “We must be seriously concerned about the inequality of income distribution as well.’’
Karunanayake even told the SCMP that he is quite content over Port City environmental reports.
“We have given all the necessary clearances. Now it is up to the investors to sort out the minor details,” Karunanayake told Friday’s SCMP.
“On our part, the government is happy with the environmental impact assessment report for the project. It is now under public consultation.”
In fact there is no public participation in discussing the supplementary report, which is only available at 11 locations, all in the Western Province. Not even in Dehiwala or Mount Lavinia.
Karunanayake also said the Chinese state-owned builder has been told to accept a leasehold arrangement for the land, rather than freehold.
China Harbour Engineering Company, a unit of Hong Kong-listed China Communications Construction Co is the builder and investor.
Since The Sunday Times began revealing details of the project, the company has stopped filing reports in English in the Hong Kong Stock Exchange, except for unrelated notices. The interim earnings statement in August, in English, has no mention of Port City.
Referring to the leasehold arrangement, Karunanayake said: “This is in accordance with the law of the land. Foreigners can’t own land in this country and everyone has to abide by it.’’
Not so. In the budget, he proposed to consider removing ownership restrictions on identified investments and to abolish the tax on land leases by foreigners.
The SCMP cites a senior Chinese executive as saying that Port City leasehold negotiations would begin in two weeks.
Unnamed executives at related Chinese companies have told the SCMP the project was expected to restart around February.