Govt. halts $1.5 b Port City project
Published : 12:43 am March 6, 2015 | 1,398 views | 3 comments | 
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- Temporary suspension on interim report of PM special commission
- Chinese company given two weeks to submit approvals, Cabinet to discuss follow up
- President visit to China to proceed as planned, says Rajitha
Port City project – Pic by Lasantha Kumara
By Uditha Jayasinghe
Adding a new twist to a controversial topic, Cabinet yesterday suspended the $ 1.5 billion Port City project, demanding the Chinese company submit its approvals within two weeks.
Multinational China Communications Construction Company (CCCC) subsidiary China Harbour Engineering Company is creating the new island off Colombo’s harbour, which was started during former President Mahinda Rajapaksa’s decade in power.
Prime Minister Ranil Wickremesinghe, who had earlier warned the Port City would be scrapped if it failed to meet environmental standards, appointed a special committee to probe the validity of the deal.
This committee had submitted a report to the country’s powerful Cabinet of Ministers on Wednesdayoutlining that relevant approvals had not been met.
“Taking into consideration the recommendations of this interim report, the Cabinet of Ministers has approved to temporarily and immediately suspend the implementation of the project and to advise the relevant company to present within a period of two weeks the approvals obtained for the project,” Cabinet Spokesman and Health Minister Rajitha Senaratne told reporters.
The committee is headed by Ajith de Costa. Professor Ruchira Kumarathunga, Dr. N.P. Wijeyananda, Dr. Anil Premarathne, Professor Samantha Hettiarachchi, Channa Fernando, A.S. Obesekara and Sunila Jayawardena are the other members. Their report will be further examined by a Cabinet Sub-committee headed Premier Wickremesinghe.
Addressing Parliament last month, Wickremesinghe said the findings of these committees would be made available to the public. He also said facts relating to the Port City were disclosed to Parliament previously.
Yesterday at the Cabinet briefing, Senaratne insisted that the Government had made a pledge to continue development projects started by former President Mahinda Rajapaksa. However, he stressed that the Government would evaluate these to ensure that the best deal would be had by the people of Sri Lanka.
Acknowledging that the any cancellation of the deal could have legal and foreign policy ramifications, he noted the Government would look to address those concerns in the future and the tour of President Maithripala Sirisena to China would continue as planned at end-March.
“We are awaiting the official notification of the Cabinet and will take action accordingly,” Sri Lanka Ports Authority Spokesman Nalin Aponso told the Daily FT.
Investment Promotion Minister Kabir Hashim also said the Attorney General’s Department had been requested to look at the contract to ascertain whether the Sri Lanka Ports Authority has the power to approve such a project.
The three months given for Strategic Development Projects to get Parliament approval for specific concessions also lapsed last month.
“Within three months you have to get it approved in Parliament,” Deputy Investment Promotion and Highways Minister Eran Wickramaratne told Bloomberg last month. «They have to talk again,” he added.
Known to be the single largest investment project in Sri Lanka, the Port City includes Sri Lanka’s first 100-story skyscraper under Phase II of its work. This phase would include the construction of hotels, shopping malls and a golf course as well as a F1 track.
The site is on 233 hectares of reclaimed land along the iconic coastline of Colombo. Under the proposed deal, 108 hectares would be given to the Chinese firm, including 20 hectares on an outright basis and the rest on a 99-year lease.
Outright ownership of land by foreign parties is illegal according to Sri Lankan law and this point of the contract has attracted much Opposition criticism.
Over the past month CHEC ramped up advertising about the project, insisting it would put a spotlight on Sri Lanka, by positioning the island as the ultimate ‘Gateway to South Asia’ and strengthen tourist arrivals over the next 30 years.
They also insisted an initial Technical Feasibility Study and environmental assessment of the project was made by the University of Moratuwa in 2010, appointed by the Sri Lanka Ports Authority (SLPA), and later approved by Government agencies.
Construction since December also blitzed along with the size of the reclamation, almost doubling in a short span of time, but Senaratne insisted work at the site would stop once the Cabinet decision was communicated.
This week hundreds of protestors marched to the President’s Office demanding construction ends as it was causing damage to beaches further up the coastal belt and harming fishing communities.
Since the end of a three-decade war in 2009, China emerged as Sri Lanka’s largest loan provider with an estimated $ 5 billion dollars worth of projects signed. Chinese President Xi Jingping ceremoniously flagged off the Port City project when he visited the island last September when both countries inked over 20 agreements.
Adding a new twist to a controversial topic, Cabinet yesterday suspended the $ 1.5 billion Port City project, demanding the Chinese company submit its approvals within two weeks.
Multinational China Communications Construction Company (CCCC) subsidiary China Harbour Engineering Company is creating the new island off Colombo’s harbour, which was started during former President Mahinda Rajapaksa’s decade in power.
Prime Minister Ranil Wickremesinghe, who had earlier warned the Port City would be scrapped if it failed to meet environmental standards, appointed a special committee to probe the validity of the deal.
This committee had submitted a report to the country’s powerful Cabinet of Ministers on Wednesdayoutlining that relevant approvals had not been met.
“Taking into consideration the recommendations of this interim report, the Cabinet of Ministers has approved to temporarily and immediately suspend the implementation of the project and to advise the relevant company to present within a period of two weeks the approvals obtained for the project,” Cabinet Spokesman and Health Minister Rajitha Senaratne told reporters.
The committee is headed by Ajith de Costa. Professor Ruchira Kumarathunga, Dr. N.P. Wijeyananda, Dr. Anil Premarathne, Professor Samantha Hettiarachchi, Channa Fernando, A.S. Obesekara and Sunila Jayawardena are the other members. Their report will be further examined by a Cabinet Sub-committee headed Premier Wickremesinghe.
Addressing Parliament last month, Wickremesinghe said the findings of these committees would be made available to the public. He also said facts relating to the Port City were disclosed to Parliament previously.
Yesterday at the Cabinet briefing, Senaratne insisted that the Government had made a pledge to continue development projects started by former President Mahinda Rajapaksa. However, he stressed that the Government would evaluate these to ensure that the best deal would be had by the people of Sri Lanka.
Acknowledging that the any cancellation of the deal could have legal and foreign policy ramifications, he noted the Government would look to address those concerns in the future and the tour of President Maithripala Sirisena to China would continue as planned at end-March.
“We are awaiting the official notification of the Cabinet and will take action accordingly,” Sri Lanka Ports Authority Spokesman Nalin Aponso told the Daily FT.
Investment Promotion Minister Kabir Hashim also said the Attorney General’s Department had been requested to look at the contract to ascertain whether the Sri Lanka Ports Authority has the power to approve such a project.
The three months given for Strategic Development Projects to get Parliament approval for specific concessions also lapsed last month.
“Within three months you have to get it approved in Parliament,” Deputy Investment Promotion and Highways Minister Eran Wickramaratne told Bloomberg last month. «They have to talk again,” he added.
Known to be the single largest investment project in Sri Lanka, the Port City includes Sri Lanka’s first 100-story skyscraper under Phase II of its work. This phase would include the construction of hotels, shopping malls and a golf course as well as a F1 track.
The site is on 233 hectares of reclaimed land along the iconic coastline of Colombo. Under the proposed deal, 108 hectares would be given to the Chinese firm, including 20 hectares on an outright basis and the rest on a 99-year lease.
Outright ownership of land by foreign parties is illegal according to Sri Lankan law and this point of the contract has attracted much Opposition criticism.
Over the past month CHEC ramped up advertising about the project, insisting it would put a spotlight on Sri Lanka, by positioning the island as the ultimate ‘Gateway to South Asia’ and strengthen tourist arrivals over the next 30 years.
They also insisted an initial Technical Feasibility Study and environmental assessment of the project was made by the University of Moratuwa in 2010, appointed by the Sri Lanka Ports Authority (SLPA), and later approved by Government agencies.
Construction since December also blitzed along with the size of the reclamation, almost doubling in a short span of time, but Senaratne insisted work at the site would stop once the Cabinet decision was communicated.
This week hundreds of protestors marched to the President’s Office demanding construction ends as it was causing damage to beaches further up the coastal belt and harming fishing communities.
Since the end of a three-decade war in 2009, China emerged as Sri Lanka’s largest loan provider with an estimated $ 5 billion dollars worth of projects signed. Chinese President Xi Jingping ceremoniously flagged off the Port City project when he visited the island last September when both countries inked over 20 agreements.
China plays down Port City issue
The Chinese Government yesterday played down the decision taken by Sri Lanka to suspend the Colombo Port City project.
Chinese Foreign Ministry Spokesper  son Hua Chunying said that the review on the project conducted by the Sri Lankan side, which is not exclusive to China’s cooperation projects in Sri Lanka, aims to create a better investment environment.She recalled that when Foreign Minister Mangala Samaraweera paid a visit to China from 27-28 February, at the invitation of Foreign Minister Wang Yi, he had said that Sri Lanka welcomed Chinese companies’ investment and development in Sri Lanka. Hua Chunying said the Sri Lankan side will keep in close contact with the Chinese side on the review result of China-related cooperation projects. She said that China understands and respects the efforts made by the new Sri Lankan Government to improve the investment environment and believes that the Sri Lankan side will properly resolve relevant problems and preserve Chinese companies’ confidence to invest in Sri Lanka in the overall interests of China-Sri Lanka friendliness and the fundamental interests of Sri Lanka’s national development. (Colombo Gazette) |
Comments
3 Responses to “Govt. halts $1.5 b Port City project”
- N.Wimaladasa on March 6th, 2015 4:36 amGreatest tragedy of ours economic development of post independence Sri lanka.
shorted sight decision of suspended Sea Port Project by Ruling class in power.
We as nation lost ample an opportunity of long-term investment and irreclaimable economic damages our growth of national capitalist of sustainability development.The decision of suspends of SEA PORT PROJECT IS RESULT OF ECONOMIC OUT COME TO INVERTEBARE ERA OF SRI LANKA.All in all there was no enough room to debate by public on this ongoing projects has, been suspend less consensus and deliberations by ruling party decision.
We have incur looser as nation huge, is not easy economic losses are incurable to recover ours trading and Business.
I am not worried investment come from which corner of world, as long as its serve our purposed of advantage for National Capitalist development will be boots our sustainability of modern era come into being of Sri lanka.
Capitalism has enough room to development in future Sri lanka.
Economic sovereignty must be our own decision but not by parties of politics of handful interest elements.
What ever reason of politics that national vital and vested interest should come FIRST. - Mangala on March 6th, 2015 7:07 amThis is just a show to the public. This project would go ahead as planned. Otherwise no investor wold come to SL.
- SB on March 6th, 2015 8:42 amHow can you undo a project that has commenced ! If the cost are inflated or there are some matters that do not conform to norms then change whatever needs changing and go ahead, as stopping the project cannot be done. Even if we leave alone getting on the wrong side of China. The cost of stopping will cripple the country.What should be done is to learn a lesson and see that legislation is in place so that projects are wetted properly and when the go ahead is given there should be no political or other obstacles.
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