Colombo Port City on revival mode, post-economic collapse
The artificial beach at the Port City which opened recently. Pic by M.A. Pushpa Kumara
The Colombo Port City Development project faced unfavourable times as talks with investors slowed down as a result of the pandemic and the more recent economic crisis.
“The unfortunate occurrence of the pandemic and subsequent economic crisis created unfavourable conditions for Sri Lanka as a whole,” prior to which “positive discussions with potential investors from key target markets” were already underway, Colombo Port City Economic Commission (CPCEC) Chairman Dinesh Weerakkody told the Business Times in an emailed interview this week. He is also the Chairman of the Board of Investment of Sri Lanka (BOI).
He pointed out that nevertheless, Port City Colombo is now actively working towards reviving these conversations with investors, armed with the necessary key regulations in place.
“Our aim is to attract anchor tenants who can contribute significant investments exceeding US$100 million.”
The next stage of the project is the construction stage that is set to generate investments amounting to more than $14 billion. The construction phase will result in around $4.1 billion in locally sourced labour and materials, and generate 450,000 employment opportunities of which over 400,000 will be for Sri Lankans.
Phase one of the project is expected to break ground which is the Colombo International Financial Centre (CIFC) comprising three towers, a villa plot and a marina hotel in the Q3 of this year totalling investments at $1.3 billion.
The port city also has the most recent regulation titled the ‘Guidelines on the Grant of Exemptions or Incentives to Businesses of Strategic Importance’ that is based on investment threshold, the social and economic benefits to Sri Lanka.
These businesses are categorised into two distinct groups namely the Primary Businesses of Strategic Importance and Secondary Businesses of Strategic Importance.
Under the Primary category are businesses that make a minimum investment of $100 million per land plot or pro-rated, to lease and develop land plots or make a minimum investment of $25 million to lease and develop plots designated for the Marina or Social Infrastructure.
In terms of Exemptions of Incentives for Primary Business of Strategic Importance, a choice of two exemptions or incentive schemes specified shall be made as specified in the regulations and this will not be changed.
The Development Control Regulations (DCR) have been made to regulate the development of each land plot for the intended purpose of the Master Plan of Colombo Port City.
Another category businesses will be designated as an Authorised Person engaged in business in and from the Area of Authority of the Colombo Port City.
The Authorised Persons Engaged in Business Regulations for Port City Colombo cover six areas; Dividends or other financial benefits payable by an Authorised Person, Conversion of Sri Lanka Rupees into Designated Foreign Currencies, Engaging in Business with a Citizen of Lanka or Resident by an Authorised Person, Transfer, Lease or Rent of Marketable Land paid for in Sri Lanka Rupees, Utilisation of Retail Facilities, and Interim Measures.
Mr. Weerakkody said the port city’s five year roll out plan has identified development assets like international school, hospital, university, Colombo International Financial Centre and the Marina. The marina of six plots has already attracted investments, and developments are expected to commence by the end of this year.
Another 23 land lots covering 65 hectares are to be developed for which an investment of $5.6 billion is required through FDIs.
Port City Colombo is ready for business as the region’s first multi-currency export of services Special Economic Zone (SEZ) with the Colombo Port City Economic Commission (CPCEC) acting as its single-window investment facilitator. The port city is situated on a 269-hectare area of reclaimed land featuring a waterfront and planned urban spaces.
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