Investor’s paradise at Port City Colombo
Sri Lanka’s plans for the Port City Colombo is to make it an investor’s paradise as the country looks at improving its ease of doing business rankings by relaxing its “archaic and stringent labour laws”.
“We have very archaic and stringent labour laws and that is why we rank very low in the ease of doing business,” CHEC Port City Colombo Assistant Managing Director Thulci Aluwihare told the Business Times.
He noted that they envisaged a relaxation of some of these laws adding that the Termination of Employment Workman’s Act will not apply at the Colombo Port City. This is said to be a government decision.
As the world propels advanced cities, Sri Lanka is aspiring to be like Hong Kong, Singapore and Dubai where investors flow in. Mr. Aluwihare said that Sri Lanka has in the past ten years continued to rank at 99 in the ease of doing business index while even India has improved in its rankings and passed us. Plans had been underway to launch the Port City Colombo at the World Cities Summit in Singapore in July but now this has been postponed, he said.
Commenting on previous plans to bring this up as a financial hub, he noted that today financial services is one of the many sectors that are being looked at in terms of investors for the project.
In terms of employment generation, he noted that according to a study done by PwC the Port City Colombo is projected to bring in about 83,000 – 130,000 direct jobs for Sri Lankans.
However, while they will fill both blue and white collar jobs, senior executives will initially be foreigners, and in time they too might be replaced with Sri Lankans, Mr. Aluwihare explained.
“For instance, if we are able to attract Google then the top senior executives will be foreign and all MNCs will like to limit expatriates so the executive level will be foreign and in time they too might be replaced with Sri Lankans,” he said.
Close to 100,000 skilled workers leave the country and this number is likely to stay back in view of the economic opportunities “in your backyard “with the ability to work for multinational companies (MNCs).
Explaining whether casinos will be allowed at the Port City Colombo, he pointed out that this was a matter left for the government to decide adding that the Colombo city is not attractive enough for tourists and this is not a place that travellers stay for more than one day.
The Port City Colombo is set to attract investments from ICT, financial services, hospitality and tourism to international trade and logistics operations, wealth management and offshore banking. “The port city is positioned as a multi services special economic zone,” he said adding that they believe there is a demand for these sectors.
The missing piece in marketing this destination was the laws and regulations that is now part of the Port City bill addressing some of the inherent issues, he explained.
He noted that once the laws are enacted they could plan a roll out strategy and in this respect, Mr. Aluwihare explained that they have already established regional marketing agencies in markets like India, Singapore, West Asia and China.
“We hope to do a series of virtual events until travel resumes since borders are closed,” he said adding that “there will be a series of these summits once borders re-open.”
Moreover, they have plans to channel some of the prospective investors through the business chambers in these countries.
Dismissing allegations of becoming a Chinese colony or that there was any provision for freehold property on the Port City Colombo, Mr. Aluwihare explained that provision was there only for a 99 year lease.
He noted that the land will be owned by the Government of Sri Lanka (GOSL) and that the CHEC has made an investment of US$1.4 billion to create this land and its required infrastructure.
In return they have been given 43 per cent of land on a leasehold right that they in turn can lease it out to other investors. “We will be surrendering our leasehold right and the investor can sign a lease hold right with the GOSL – and for doing so we get the consideration,” he said.
He also noted that Sri Lankan investors have the option of investing and that there was no requirement to come through a joint venture with a Chinese firm. “Sri Lankans can invest upto 100 per cent and whoever wants to build has to make an application to the commission – they will evaluate and issue a license,” he said adding that a license was required to operate a business there.
At present 100 hectares of land is ready for development that includes commercial, residential, school and a convention centre. Concessions for investors will be granted depending on the value of investment and other aspect but they were not looking at the nationality of the investment when considering them.