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In The Press

Colombo Port City - Will it be the dream of Sri Lankan people?


President Gotabaya Rajapaksa’s Government has successfully gained a two-third, majority which the ruling party much desired, as they said, to transform the country from today’s less economic advantage state to a preferential economic advantage status.

When the election results were announced and the ruling party was declared the winners, the ruling party politicians came on TV and some said that they are going to make Sri Lanka a developed nation. Some who were having opposing view asked how that can be done when the country is overburdened with debt to China and to other international lending agencies.

In the writer’s opinion, such pessimism can be proved wrong if the newly elected government will focus on the Port City Project, plan and implement it meticulously to reap its maximum benefits. Unprecedented economic gains can be achieved through the accelerated successful completion of the Colombo Port City (CPC) development project. This project has bigger potential than what people have so far been informed in the media.

The newly-elected People’s Government, as its first priority, should focus on this project and give it the same importance and weight what then J.R. Jayewardene Government, after 1977 election win, had given to the Accelerated Mahaweli Development Project.

Background information about CPC project

Colombo Port City (CPC) is a brand new city development built off the coastal line of the Central Business District of Sri Lanka’s vibrant commercial capital, Colombo. Spanning 269 hectares ( 2.69 sqkm = 664 acres) of reclaimed land from the sea, CPC will be South Asia’s premier residential, retail and business destination, offering unmatched planned city living along the warm waters of the Indian Ocean. The development will comprise five different precincts including the Financial District, Central Park Living, Island Living, The Marina and the International Island.

When fully completed, CPC will have over 560 hectares (5.6 sqkm = 1383.8 acres) of built space, boasting the best in design and standards. Its lifestyle and business offerings will include world-class facilities and spaces in healthcare, education, entertainment, hotels and restaurants, retail and office with an integrated resort and a marina, offering the best in living by the sea. Built on the latest sustainable city designs and smart city concepts, CPC will be the most liveable city in South Asia.

The developer of the project is CHEC Port City Colombo Ltd. through China Harbour Engineering Company (CHEC) which is part of China Communications Construction Company Ltd. (CCCC).

The project was inaugurated by the Government of former President Mahinda Rajapaksa on 17 September 2014, attended by the Chinese President Xi Jinping. However, after President Sirisena came to power in January 2015, the project was put on hold for some time and recommenced after a prolonged delay.

The recent media report of 11 June by Nishel Fernando stated that the initial extent of the reclamation under phase-I is 269 hectares and the project cost is $ 1.4 billion (which will be subject to price escalation due to the delays caused by the previous Government and force majeure reasons due to COVID-19 pandemic) out of which $ 800 million of work has been completed.

As per this latest report, out of 269 hectares of reclaimed land, 178 hectares are considered to be marketable. The Chinese development company, CCCC owns 116 hectares of the marketable land on a 99-year lease and the Government of Sri Lanka owns the remaining 62 hectares. In addition, 91 hectares of land are allocated to be used as public spaces.

The present Government has appointed a Cabinet-approved working committee to review and accelerate JV with CHEC Port City Ltd.

Establish a separate entity to plan, implement and manage CPC

If the Government wishes to reap the full benefit of this project, it should establish a separate company and give it the meaning of ‘Colombo Port City Development and Management Company (CPCDMC)’. This proposed company should ideally be under the purview of a capable State minister who will work directly under the President or the Prime Minister. This company should be set up under the leadership and management of people of highest calibre and integrity, who have performed successfully in the Government and private sector.

The proposed CPCDMC should be responsible for-

1. Prepare detailed plan that outlines the benefits of this project to the people.
2. Set accelerated time lines to achieve phased completion of the project.
3. Identify all the risks that the project will be subject to during construction and after completion.
4. Prepare a construction management plan.
5. Prepare detailed investor acquisition, investor benefit and management plan.
6. Set up support infrastructure framework.
7. Set up legal framework.
8. Address the geopolitical concerns of the neighbouring India

Benefits of this project to the people

The biggest complaint of the local construction industry of this country, during the last decade, was that Chinese and other foreign big contactors have come and stolen their opportunities. Unlike the European and Japanese big construction companies, the Asian contractors who have secured large tenders have shared very little work with the local construction companies. Due to this reason, the local contractors have felt that they have not adequately been benefited with the ongoing development work of the country due to most of the major construction projects having been awarded to the foreign contractors.

Most of such foreign contractors have brought their management staff, engineers, technical staff and major portion of skilled workers from their countries. The creation of job opportunities has been insignificant. Benefits and working conditions offered to the local staff and workers have not been satisfactory. The recent protest by a group of staff and workers who had worked for CPC project, as shown on TV on 11 August, complained that they had been treated without due respect.

The proposed CPCDMC should negotiate with the major partner of this project, China Communications Construction Company (CCCC) and the future investment companies (FDIs) to allocate substantial portion of the construction works to the local consultancy and construction companies.

With the overall investment benefits that will be offered to the FDIs through proposed free port concept, CPCDMC should put down necessary terms and conditions that will reap distinctive benefits to the local companies and employment opportunities for the local people. If this doesn’t happen, the people of this county will not reap the front-end benefits of this project and will feel disgruntled.

CPCDMC should set out terms and conditions of engagement of the local consultancy and construction companies, favourable to the local companies and terms of engagement of employment at least to the standards prevail in the Middle East. The benefits we give to the FDIs should balance with the front-end and long term benefits offered to the local people and local companies.

Realisation of this project will definitely benefit the tourism industry of the country. CPC will attract high spending customers to the country and will significantly enhance the tourism and hotel industry thereby benefiting a larger section of our population.

Set accelerated timelines

The Government should target to complete the full development of initially reclaimed area of 269 hectares in next 10 years in two phases (phase-II and phase-III). Phase-II should be operational within first five years and people will see the benefits and realisation of their expectations by the newly-elected People’s Government by the end of their first term.

This will not be possible unless committed, honest and capable people are appointed and serious work will start within next six months. Initial setting up work can be done by the already set up action committee until setting up of fully-fledged proposed company, CPCDMC.

Identify and address the risks

The first and the foremost important risk is the perception risk of the masses. CPC should prepare its communication plan for the citizens of the country, so the masses will see that the perceived benefits are more than the perceived negative points. This will hamper any attempt in the future by opposition politicians to mislead the masses, as it always happens in this country. The communication plan should address different segments of the population and their perceived concerns. It is very important that all segments of the population should see the front end and ultimate benefits of the project.

The Maha Sangha, other religious and community leaders should be briefed of the total accelerated plan of CPC project and explain how the government has addressed their concerns. Communication plan should emphasis the benefits to the people and how this project will raise the living standards of the people. Give them a clear detailed plan about the steps that will be taken to mitigate the overall impact of the project towards preserving the culture, national security and national integrity.

Detail all other identified risks that may possibly hamper the accelerated plan of completion, the risks that can deter the intended long-term benefits and that can impose operational barriers when the new city will start functioning.

Construction management plan

CPC should have a well-defined construction management plan for the proposed phase-II and III. This plan should address

Procurement of construction materials - Fine aggregates required for the construction works cannot be sourced through the conventional sources of river sand and manufactured sand. It is imperative that offshore sea sand processing facility should be set up by the Government or through private sector partnership to dredge and process offshore sea sand suitable for the future construction works of CPC, the supply to match with the accelerated plan. This processing plant should be set up closer to the project location, either in Kerawalapitiya or near the estuary of the Kelaniya River in Mattakuliya. If all the rocks required for the concrete aggregates of the planned construction works are sourced within the country, our natural resources will significantly deplete and can put a strain on the construction works of the future generations in this country. Hence, proposed CPCDMC should negotiate with CCCC, other major investors and their Architects to minimise use of concrete and propose alternative materials such as structural steel which can be efficiently used in high rise construction. Use of steel construction also can speed up the project. The protective coating technology is now very advanced and provides solutions to protect steel from corrosion and give it the required fire resistance.
- CPC need to set up their independent water treatment facilities within the precincts of CPC to treat water drawn from the Kelaniya River to cater to the water supply demands of CPC.
- CPC need to set up their own thermal, solar and wind power generation plants to be self-sufficient in meeting their electricity demands without creating a burden to the country’s power supply.
- CPC should set up their own sewage and waste water treatment facilities.

Investor benefit and acquisition plan

The UK Government is now in the process of setting up 10 free ports in their country to boost their economy. The ministerial forward of the report done by the Government to obtain public consultation on the ‘Free Port Concept’ dated February 2020, starts with the following paragraph -

“In the Ancient World, Greek and Roman ships – piled high with traders’ wines and olive oils – found safe harbour in the Free Port of Delos, a small Greek island in the waters of the Aegean. Offering respite from import taxes in the hope of attracting the patronage of merchants, the Delosian model of a ‘Free Port’ has rarely been out of use since. Because Freeports still offer that same story of trade and prosperity across the modern world. From the UA to the USA, China to California, global Freeports support jobs, trade and investment.”

We too should use the free port concept to attract investments and make it a place attractive for people to invest and have exclusive living and entertainment.

Supportive infrastructure

The Terminal-2 expansion project of BIA should provide necessary facilities for the direct transfer of passengers destined to CPC through separate channels. The Port Access Road should be completed before the scheduled completion of phase-II of CPC.

People who work and live in CPC will obtain necessary visas if they want to enter the old Colombo City and journey to the rest of the island. Separate coastal surveillance system in the form of border guards should be established to prevent illegal activities and illegal entry to CPC through the sea.

The Government, in parallel, needs to develop the framework and facilities of the tourism industry in the rest of the country to attract people who work and live in CPC and those who travel to CPC for entertainment, to visit the country’s tourist attractions and increase the income of the people and businesses related to the country’s tourism industry.

Legal framework

A separate legal framework should be established for the operation of CPC. Such legal framework should be inherent with the free port concept.

Geopolitical concerns of neighbour India

The Chinese Communist Party and the President Xi Jinping should be pleased that the recent General Election has paved the way for President Gotabaya Rajapaksa to form a strong and stable government in Sri Lanka. There is no doubt that China will extend its fullest support and blessings to accelerate the CPC project. However, the present Government always should bear in mind the geopolitical concerns of India due to the increased presence and building up of Chinese assets in the Indian Ocean with their direct investment and long-term lease of assets in CPC.

A recent article in the Indian Defence Review, Jan-Mar 2020 Vol. 35(1), by Maj. Gen. S.B. Asthana titled ‘Is China-Myanmar Economic Corridor (CMEC) turning out to be another CPEC for India?’ analyses the impact of the recently-signed 33 MOUs between two countries giving a push to CMEC. India closely watches the developments and any moves by China in the Indian Ocean.

This article further states - “Strategically India will have to continue with improving defence profile of its littorals in Bay of Bengal, collaborate with other navies and observe progress of CMEC almost like CPEC (China-Pakistan Economic Corridor).”

The Government, while pushing for the Chinese Government’s support to accelerate the CPC project, should study the Indian concerns of this project in detail and take measures to mitigate such concerns. The Government should solicit the support of India also to invest in CPC and make them also partners in this project.

How LTTE terrorism started, who supported it and how former President J.R. Jayewardene’s plans of making Sri Lanka a Singapore failed miserably should not be forgotten and disregarded.

The writer could be reached via email at thilaksilva1@yahoo.com