New investments for the Colombo Port City special economic zone

The Sri Lankan government wants to build on the concept of blue economy. Unveiled in April to attract foreign investors other than from China, the project is not likely to succeed. The opposition slams the bill setting up an independent Economic Commission.

Colombo (AsiaNews) – Colombo Port City (CPC) megaproject project is set to attract US$ 4 billion in investment from different sources.

As part of this, "The government is preparing to launch the blue economy concept,” said sources in Sri Lanka’s Ministry of Investment Promotion speaking to AsiaNews.

The goal is to develop “port city activities, sustainably using ocean resources to drive economic growth, increase job opportunities, and improve livelihoods while preserving the ocean ecosystem.”

According to a senior official with the China Harbour Engineering Company, the project will feature building international level testing vessels, marine floating laboratories, marine floating herb labs, and marine floating production facilities.

The Monetary Board of the Central Bank of Sri Lanka (CBSL) and the Ministry of Finance have approved offshore licenses for four banks regulated by the Colombo Port City Economic Commission (CPCEC).

The CPCEC granted investors six new indentures of lease for 99 years valued at approximately US$ 200 million, while investors could commit US$ 600 million in collective investment.

It is estimated that this will generate about US$ 12-13 billion in additional value annually by providing services.

A senior port city official told AsiaNews that the "Economic Zone at the Port City is currently set with the objective of promoting export services to attract foreign direct investments (FDIs)”.

Meanwhile, infrastructure facilities at the region’s first Downtown Duty-Free (DF) Mall has been completed.

Discussions are currently underway with investors from India, Southeast Asia, the Middle East, China and Japan over the port city project.

In April this year, an investor event showcasing the Port City Colombo Special Economic Zone was held at Sri Lanka’s High Commission in the United Kingdom to create awareness of the Multi-Services Special Economic Zone.

According to top Port City Colombo officials, “From 2021, the CPC was attracting investors, initially for the golf course followed by the ATV racing centre, a first in South Asia. The Indian subcontinent is the largest target market and offers key opportunities to Indian businesses. Japanese Investors are also poised to invest in CPC.”

Some analysts warn, however, that the “the project is controversial since its inception as it is considered an economic engagement to serve Chinese strategic ends and expand its influence in the South Asian region that has traditionally been considered India’s strategic backyard.”

In April last year, when the CPC Economic Commission Bill was presented to parliament, opposition parties objected to it, as the bill provided for the setting of “an all-powerful commission answerable to no one and if this bill is passed, we will get one law in the country and another in Port City.”

Under the proposed law, Commission members would not be responsible to parliament, parliamentary committees, the Auditor General or any constitutional authority.