Colombo Port City management is making valiant efforts to attract foreign investors to lease out 74 blocks as no investor is willing to take a risk in the country’s severe economic crisis coupled with preemptive debt default, official sources said.
Sri Lanka’s economic and political crisis is overshadowing grand plans to build a new international city on a 269-hectare sandy plot of reclaimed land off the coast of its commercial capital, Colombo.
“It is difficult to convince investors and establish a financial centre in a country effectively in default,” says Aritha Wickramasinghe, a Colombo-based financial lawyer who has advised on the development of Port City Colombo’s financial centre
However CHEC Port City Colombo has entered into lease agreements with investors, leasing six land slots out of the 74 land slots available for lease at the Port City,
Port City Colombo officials said that these investors are both locals and foreigners and they are hoping to lease the rest of the land slots within the next 15-20 years.
“The entire project will be completed in 25 years including the construction. We are looking to lease out the lands within the first 15-20 years, so the construction for the last slot of land after completing the deal would be done in time,” they stated.
They noted that their estimate is to lease at least three to four plots of lands each year for the next 15-20 years and added that so far, they have kept up with this annual target.
According to him, Port City is hoping to attract investors from South Asia, particularly from India.
The CIFC Mixed Development Project comprising a total land area of 6.8 hectares (ha) is expected to require a total investment of $ 1 billion and will involve the incorporation of a special purpose vehicle (SPV) company, jointly managed by Browns Investments, the strategic investment arm of the LOLC Group, and China Harbour Engineering Co. Ltd. (CHEC).
Phase One of the CIFC Mixed Development Project, which will comprise a land area of 3.06 ha, will involve an investment of $ 450 million and according to Jayaratne, the estimated timeline for the completion of Phase One of the CIFC project is by 2025/26.
In terms of residents and employment opportunities, Colombo Port City is expected to accommodate over 70,000 residents and 200,000 workers.
Port City is also gearing up to establish its own Stock Exchange, but the regulators are yet to decide on how it will operate and the regulations that will govern the exchange.
Colombo Port City is expected to give its own tax breaks running up to 40 years and exempt businesses from a number of laws including an exchange control law in its area of authority.
