CHEC Port City Colombo Managing Director Jiang Houliang (right) handing over Port City Social Responsibility Report 2018-2019 to Urban Development, Water Supplies and Housing Facilities Ministry Secretary Dr. Priyath Bandu Wickrama (left) in the presence of Urban Development State Minister Gamini Lokuge and other dignitaries
Pic by Kushan Pathiraja
By Nishel Fernando
The government plans to commence a joint marketing campaign to promote the investment opportunities of Colombo Port City with the project company, CHEC Port City Colombo, subsequent to enacting a comprehensive legal framework after May this year.
“We are waiting until we complete the legal framework, which is likely to take place after May. Then, we are planning to go out and promote the investment opportunities in Colombo Port City,” Urban Development, Water Supplies and Housing Facilities Ministry Secretary Dr. Priyath Bandu Wickrama told Mirror Business yesterday, on the sidelines of the launch of Port City Social Responsibility Report 2018-2019.
The new government appointed a Cabinet-approved working committee to review and accelerate the joint venture with CHEC Port City, a unit of China Communications Construction Company (CCCC).
However, the progress of the proposed legal framework is set to come to a standstill due to the forthcoming parliamentary elections in March-April.
The proposed legal framework is expected to bring in the regulatory frameworks for foreign investment, including for land ownership.
The Central Bank recently announced that the proposed Banking Act, which is to be enacted in 2021, would contain provisions to extend regulations to banks, which are to be established in the Colombo International Financial Centre (CIFC) in Colombo Port City.
The Colombo Port City project spans over 269 hectares of reclaimed land from the sea, of which 178 hectares would be marketable land with the gross floor area up to 5.73 million square meters.
CHEC Port City has obtained 116 hectares of this land on a 99-year lease and it is responsible for the investment, financing, planning and construction of the project as well as the construction of supporting facilities at the project site.
Dr. Wickrama emphasised that three to four projects would commence within this year and each project would require a minimum of US $ 300-400 million investment.
CHEC Port City signed a memorandum of understanding (MoU) with the previous government to develop a US $ 1 billion worth building complex at the CIFC and the firm was planning to draw another US $ 1 billion for the second building complex.
The United States-based Skidmore Owings & Merrill (SOM) has already been awarded the design contract of the building after being selected as the winner of a global competition to design the master plan for the first building complex.
In addition to Chinese investors, Dr. Wickrama noted that investors from the Middle East, Singapore and India have shown a keen interest in the project.
The CIFC is aimed to fill the gap between international financial centres of Dubai and Singapore by attracting major international financial institutions to settle in and effectively promote the development of the financial industry in Sri Lanka and South Asia.
However, a senior official attached to the Colombo Port City project revealed that the first project to be commenced would be a yacht marina, which already has several foreign investors on board.
The recreation and entertainment complex, shopping resort, five-star hotels and marina are anticipated to attract high-spending tourists across the world and help Colombo to transform from a tourist hub to a tourist destination.
CHEC Port City plans to complete the construction of the beach, marina and Central Park by 2022, while the completion of phase one of the CIFC and first hospitality plot is scheduled for 2023.
Dr. Wickrama remarked that based on the demand for land plots, the government and project company would release land plots to the market for investments.
Colombo Port City was established as an urban development area last year under the Urban Development Authority (UDA), bringing all the development activities on the reclaimed land under the purview of the regulations and supervision of the UDA after it was declared as part of the Colombo district.“The government will sign all the lease agreements with investors,” Dr. Wickrama added.
A new entity is also expected to be established to manage the activities of Colombo Port City as a joint venture between the government and CHEC Port City.
The CCCC has committed to invest US $ 1.4 billion to undertake land reclamation, construction of marine structures, including construction of breakwater barrier and infrastructure development.
Chinese Ambassador to Sri Lanka Cheng Xueyuan noted that the project company has already invested nearly US $ 800 million while creating 500 employment opportunities.
CHEC Port City completed the reclamation of 269 hectares of land from the ocean in January last year and all marine structures were completed last August.
Phase one of the Port City infrastructure constructions commenced in July 2018 and is scheduled for completion next year. The project, upon completion in 2041, is expected to draw foreign investments with a total value estimated at US $ 13 billion.