Indian IT companies interested in expanding to Port City
Indian IT companies are beginning to show interest in Colombo’s Port City for expansion amidst hundreds of applications pending approval to start businesses in the new city, top officials said.
Indian IT companies based in the South of India are especially interested in this type of a move, they added. “For these companies, it is easier to travel to Colombo than to some of the other cities in India while the travel times are also shorter than some of the other cities in India. For example, Bangalore which is the IT hub is just one hour away from Colombo,” one official explained. He further said that for these companies, the expansion is easy to the Port City as well and they can also diversify their risk.
He added that there is also some interest from property development companies. “The Ceylon Real Estate Development Company is interested in building and will start after the approvals are granted for a residential complex as well as a hotel.”
The Port City roped in 65 companies by June last year with officials saying that they are on target to make 100 by year-end with 84 applications approved for business so far. “This is since August last year and at least 100 applications are pending approval,” a second official said.
He said with the advent of the new government; the Port City Commission was re-established last December and is now under the Ministry of Finance. He noted that the ministry was busy with the budget and the IMF third tranche negotiations, which is why the approvals are late. “During the next two months, we will make the Port City a viable success. The investors are at a sweet spot with the majority of the entity being with the government.”
He said the investors are concerned about schools, hospitals, and universities still not being established in the Port City. “Our city hospitals and Gateway had discussions about two years ago with the then government to establish a hospital and a school, respectively. These discussions are yet to materialise,” he added.
Reputed international and local corporate entities, including Asiri Port City Hospital (Pvt) Ltd, TIQRI, CODEGEN Innovations, 99x Technologies, Echelon Trade (Pvt) Ltd, and Port City BPO (Pvt) Ltd, have been additionally designated as Businesses of Strategic Importance.
A US$80 million Chinese grant through the Chinese International Development Agency for a convention centre at the Port City in a 5.2-hectare plot was discussed during the president’s visit to China recently, officials said. They said that China has sent consultants for a feasibility study for this venture.
IFS’s holding company is establishing a new venture in Colombo Port City which will provide IT services to non-IFS companies owned by their investors, and it’s expected to generate thousands of employment opportunities in the years to come, according to officials.
So far primarily service companies, business processing outsourcing companies, knowledge-processing outsourcing companies, trading firms, and IT companies have registered under Port City Businesses of Strategic Importance, they said.
The firms are required to bring in dollar investments and they have to be channelled from overseas. Also, there is a requirement for the number of employees at the companies, within three years.
These companies have a Port City registration licence but operate from designated stations such as the Trace Expert City, outside Port City till the buildings come up. Their offshore operations have been tax-exempt for 25 years.
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