Port City Colombo brings good news this New Year that it is all set to open its promenade to the public. Within a few days, people can take a whiff of the Indian Ocean breeze from the Port City side, by walking across Galle Face Green towards the newly constructed bridge and taking a stroll on the two km stretch of beach belonging to the newly reclaimed land.
Port City Colombo also marks new beginnings this year with the commencement of vertical constructions in the first quarter. China Harbour Engineering Company (CHEC) and Browns Investments PLC said their joint venture – the Colombo International Financial Centre (CIFC) in 2020 and the development work will commence within the next few months. The CIFC Mixed Development Project will be the first of many landmark development projects planned for Port City Colombo. Port City Colombo can be termed as one of the pet projects for the Government to boost its much-needed foreign reserves.
CHEC Port City Colombo (Pvt) Assistant Managing Director Thulci Aluwihare spoke about the Port City being a catalyst in driving Sri Lanka’s transition to modern services.
“Although almost 60 percent of our economy is service-based, modern services account for less than 10 percent. Export of such modern services would create sizable value addition to accelerate economic growth directly as well as through multiplier effect. Many of these sectors are not very capital intensive – their key asset is human capital, and could scale at a much faster pace. This is how city states such as Singapore and Hong Kong, where services contribute 70 percent and 90 percent of GDP, have emerged as economic super powers within a span of a generation,” he said.
Highlighting the potential of Port City Colombo to provide modern services, Aluwihare said the new city would promote services such as IT, maritime services, financial services, professional/ knowledge services, corporate headquarters and so on and ease of doing business to create a destination appeal for trade and commerce.
He added that industrial or manufacturing will not be permitted within the Port City although it will complement activities in the rest of the country including BOI Zones and Hambantota Industrial Zone. This is due to the negative implications on the wider real estate of Colombo and also the negative aesthetic appeal.
“While the backend manufacturing will take place in a more suitable industrial environment, the frontend client servicing and trading operation can take place in Port City under suitable business regulations,” he said, adding that Port City will be an alternate, and cost-effective destination to Singapore, Hong Kong and Dubai.
The passage of the Port City Economic Commission Bill in Parliament last year makes way for investors to do business with ease, making the new city more appealing to investors than elsewhere in the region. It has enabled sufficient economic and administrative autonomy while keeping to the laws of the land.
Ease of doing business
“The Port City Economic Commission as the Single Window Facilitator will promote ease of doing business by addressing some of the inherent pain points and create a destination appeal to attract FDIs and large MNCs to set up in Port City. I believe this law is quite progressive and we can now have some serious conversations with potential investors and brands to consider Sri Lanka as an appealing place to do business,” Aluwihare also said.
He stressed the importance of ease of doing business in competing to attract investors. Immigration policy, paying taxes, clear foreign exchange rules, access to labour and skilled levels, cost and labour laws, external connectivity, protection of investment and ability to repatriate profits and capital upon exit are important considerations, he noted.
“Above all, what they look for is a transparent process with a responsive and well-functioning agency, where clear guidelines and information can be obtained remotely and through desktop research. They look for a proper process required for setting up businesses without being subject to some minister’s discretion,” Aluwihare said.
In this regard, he said, Port City Colombo gives a unique opportunity for investors interested in Sri Lanka.
“Strengthening the institutional framework, in this case the Colombo Port City Economic Commission, and removing or minimising political interference is crucial for the success and longevity of this Special Economic Zone. Ideally, Port City should be an exemplary city from an administrative and governance perspective and such policies, once tested and proven, should be selectively rolled-out in the rest of Sri Lanka,” Aluwihare also added.
Apart from investment, Port City Colombo also aims to attract city tourism, a concept which had not been tried out to the full extent. Although city tourism is offered in other countries, Colombo does not cater to this due to the lack of resources and initiative. However, Aluwihare said the new city has addressed this vacuum.
“Port City Colombo is currently offering sailing from the marina, ATV (All-Terrain Vehicle) sand dunes adventure rides, and an aqua golf range, bringing Port City to life and creating a footfall to promote city tourism rather than wait until its completion.More activities such asgo-karting, quad biking, water sports for adults and children, a beach club and so on would be available for local and foreign tourists. Another exciting addition would be the downtown duty-free retail facility that would open this year. We believe that these activities would entice tourists to spend more time in Colombo, boosting the city hotels, retail and F&B sectors,” Aluwihare said.
He added that MICE tourism (meetings, incentives, conferences and exhibitions) is an area with significant potential as MICE tourists spend twice as much time as the average leisure traveller and the facility envisioned at Port City could accommodate as much as 5,000 visitors at a time.
He said Port City is centrally located, connecting most other tourist destinations through the national expressway network.
Aluwihare also said the investment made thus far is only the tip of the iceberg. “We estimate the investment requirement to develop the real estate is $13.5bn, at today’s cost. This presents exciting opportunities, not only for the construction and materials sectors, but also for the services sector, including SMEs to provide the required goods and services to Port City”.
“It would be deemed as export since payment for such procurement would be in foreign currency, which will ensure inflow of much-needed foreign exchange. The economic value addition, post completion of real estate development and once operational, would be a much larger and recurring contribution to the GDP of Sri Lanka,” he also said.