Foreign Direct Investment (FDI) into the Colombo Port city will be delayed due to non finalization of relevant regulations a top official of managing company said.
Foreigners are used to invest in infrastructure in Sri Lanka, for the long-term leaving the investment value permanently remain in the island, and it can continue to create even more value through trade and commerce, he claimed.
This helps to bridge the Balance of Payments gap and strengthen the local currency, while creating new economic opportunities for locals.
Port City Colombo is Sri Lanka’s biggest FDI project, with billions of dollars waiting to flow in, but investors are hesitant as the Port City Colombo Special Economic Zone regulations are not yet finalized, he disclosed
Speaking at the Sri Lanka Economic Summit 2022, held at the Shangri-La Hotel in Colombo recently Thulci Aluwihare, Deputy Managing Director at CHEC Port City Colombo (Private) Limited said, “They were unable to execute marketing strategies due to this reason.
It also cannot proceed with other matters of logistics and outreach until the regulatory framework, as provided for by the Colombo Port City Economic Commission Act, is finalized and published by the Government of Sri Lanka.
The company cannot make any official representations to any parties until this is completed, and until there is clarity over regulations related to taxation.
He said If these matters aren’t finalized soon, it may send the wrong signals to investors and cause them to become hesitant, which will impede the progress of development, which at present is proceeding exceedingly well.”
With infrastructure development slated for completion by Q3 of 2023, Port City Colombo is Sri Lanka’s biggest FDI-funded development project with US$ 1.4 Bn committed by the project company,$1.2 Bn already having been invested, and a further $1.5 billion expected to flow in during the vertical development phase, which will commence thereafter.
A $7-million Duty-Free Shopping Mall, the first of its kind in South Asia, and a magnet for shopping and tourism, is also expected to open doors at Port City Colombo in April 2023.
The Port City Colombo Special Economic Zone (PCC SEZ) is a game changer, especially for financial services, trade, IT/BPM, tourism, retail and many other sectors. This is because of its special status as an SEZ, governed by the Port City Economic Commission.
However, although the Port City Economic Commission bill was passed in Parliament on the 20th of May 2021, there are still some delays with regard to finalizing the regulatory frameworks.
This has resulted in a virtual standstill in terms of the actual moving in of businesses, and the development of the project to its full potential, as investors and others are unsure as to the legal and regulatory procedures and processes.
