Xinhua Headlines: 6 years on, Colombo Port City set to boost Sri Lanka’s economic growth

Abstract : In September 2014, Chinese President Xi Jinping and then Sri Lankan President Mahinda Rajapaksa jointly inaugurated cooperation project Colombo Port City.

— Colombo Port City is the largest foreign direct investment project in Sri Lanka’s history.

— It will be “the main income generator for the future of Sri Lanka,” Prime Minister Mahinda Rajapaksa said.

— Dimantha
Mathew, head of research at Colombo-based investment bank First Capital
Holdings PLC, said the project is important for Sri Lanka which is
trying to establish itself as a regional financial hub.

— The
Sri Lankan government is now planning to build Colombo Port City into
the country’s first special economic zone for services.

by Shiran Illanperuma

COLOMBO,
Sept. 26 (Xinhua) — In September 2014, Chinese President Xi Jinping
and then Sri Lankan President Mahinda Rajapaksa jointly inaugurated
cooperation project Colombo Port City, which planned to reclaim 269
hectares of land from the sea to build a brand-new central business
district (CBD) integrating finance, tourism, logistics and information
technology for Sri Lanka’s capital Colombo.

Six
years have passed, and now the largest foreign direct investment (FDI)
project in Sri Lanka’s history is emerging as a city of the future set
to reshape local and regional economy.

On
Sept. 17, Rajapaksa, now Sri Lanka’s prime minister, joined the
celebration of the sixth anniversary of the project’s groundbreaking
ceremony, where he called Colombo Port City “a landmark project.”

It
will be “the main income generator for the future of Sri Lanka” to
create 83,000 direct jobs and many more indirect job opportunities for
Sri Lankans, he said.

Expressing
special thanks to China for the investment, he said, “We used to hear
many times that Sri Lanka had been losing its soil to sea erosion.
However, by this project, Sri Lanka’s land area got expanded, and for
the first time in history, newly reclaimed Port City land is now part of
Sri Lanka.”

Aerial
photo taken on Sept. 23, 2020 shows a view of the construction site of
Colombo Port City in Colombo, Sri Lanka. (China’s CHEC Port City Colombo
(Pvt) Ltd./Handout via Xinhua)

EMERGING FROM SEA

As
a flagship joint project between Sri Lanka and China within the
framework of the Belt and Road Initiative, Colombo Port City has powered
through a turbulent six-year period, overcoming numerous challenges,
including the Easter bombings in April 2019 hitting three luxury hotels
near the project and affecting the country’s tourism, as well as the
COVID-19 pandemic impacting the country less than a year later.

Yue
Yeqing, assistant general manager of China Harbor Engineering Company
(CHEC) Port City Colombo (Pvt) Ltd., a branch of CHEC undertaking the
project, told Xinhua that the initial phase of land reclamation was
completed two months ahead of schedule in 2019.

Since
then, buildings of roads, bridges, pipe networks and green parks in the
city have been implemented step by step, said Li Zenghui, engineering
manager at CHEC.

“It is expected that all the municipal engineering in construction will be completed in 2021,” Li said.

An
artificial beach has already been completed and may open to the public
soon, saplings have been planted to test the soil for a planned park,
and yacht piers in the marina section of the project have already begun
to operate, Li added.

People work at the construction site of Colombo Port City in Colombo, Sri Lanka, Sept. 22, 2020. (Xinhua/Tang Lu)

Amid
the COVID-19 pandemic, Yue’s company has introduced stringent health
protocols to guarantee the smooth construction of the project.

“Because
this land is close to the core area of the Colombo CBD, we are very
confident that we can create a new CBD area for Sri Lanka,” Yue said.

“We
hope to develop and construct this project together with investors from
all over the world, so that the Port City will contribute immensely to
the future of Sri Lanka,” he added.

BOOSTING ECONOMIC GROWTH

In
the eyes of government officials, business insiders and experts,
Colombo Port City has great potential for improving Sri Lanka’s
macroeconomic fundamentals and providing jobs.

Ajith
Nivard Cabraal, state minister of money and capital market and state
enterprise reforms, told Xinhua that the project has great potential for
boosting Sri Lanka’s economic development.

“The
investments that Port City could attract will have an impact on our
overall bottom line. The fact that the project will generate economic
activities will directly benefit our growth scenario and employment,”
Cabraal said.

“The
outside world will look at Sri Lanka with a lot more interest when we
have projects of this nature,” he said, adding that the Colombo Stock
Exchange (CSE) will also gain impetus when large foreign entities
relocate to the city and channel investments through the capital market.

Aerial
photo taken on Sept. 23, 2020 shows the construction site of a yacht
dock and a footbridge at Colombo Port City in Colombo, Sri Lanka.
(China’s CHEC Port City Colombo (Pvt) Ltd./Handout via Xinhua)

Dimantha
Mathew, head of research at Colombo-based investment bank First Capital
Holdings PLC, said the project is important for Sri Lanka which is
trying to establish itself as a regional financial hub.

“We
expect that major investment banks and finance services will set up at
the Port City first, which will attract other business entities and
facilitate new deals and investments. There could be a major benefit
towards the CSE,” Mathew said.

“If
we can make the Port City successful and attract the required foreign
investments, that will invariably have a major positive impact on our
foreign reserves and balance of payments,” Mathew said.

According
to a report in 2019 by PricewaterhouseCoopers (PwC), the project “will
have a significant impact on the national economy,” as it may generate
210,355 jobs, and add 0.7 billion U.S. dollars to the FDI, 11.8 billion
dollars to gross domestic product, and 0.8 billion dollars to government
revenue every year.

A
Chinese engineer wearing a face mask checks the construction progress
at the construction site of Colombo Port City in Colombo, Sri Lanka,
Sept. 22, 2020. (Xinhua/Tang Lu)

UNIQUE ECONOMIC ZONE

The
Sri Lankan government is now planning to build Colombo Port City into
the country’s first special economic zone for services. And Thuci
Aluwihare, head of strategy and business development at CHEC Port City
Colombo (Pvt) Ltd., showed great confidence in such a plan.

“We
believe that the Port City will be in a good position to compete with
some of the advanced markets and economies in the world due to the fact
that Sri Lanka is an emerging market with a lot of potential for
growth,” Aluwihare said.

While
there are many financial service centers in the world, Sri Lanka has
the advantage of being within a four-hour flight radius of major cities
in South Asia and East Asia, he said.

Besides,
Colombo has been ranked the most livable city in South Asia for years,
and has a pool of affordable talents, he said, adding he hopes the
project will create high-quality employment opportunities to arrest the
brain drain of some 10,000 skilled and professional workers who leave
the country every year for better opportunities overseas.

Noting
that Colombo Port City is the first planned city in Sri Lanka and South
Asia, Aluwihare said the project has focused on sustainable development
to minimize resource usage, and has provided developers and investors
with international standards to adhere to.

Aerial
photo taken on Sept. 23, 2020 shows the construction site of the green
garden areas of Colombo Port City in Colombo, Sri Lanka. (China’s CHEC
Port City Colombo (Pvt) Ltd./Handout via Xinhua)

According
to a study by Colombo-based think tank the Lakshman Kadirgamar
Institute, Colombo Port City compares favorably with similar special
economic zones in terms of sustainability and accessibility.

“Sri
Lanka performs well overall in terms of supply-side factors such as the
provision of electricity. The country compares comparatively strongly
in terms of graduates’ skill set, which is an important determinant for
Port City’s success,” the study said.

Rajapaksa also expected Colombo Port City to become the main financial and economic hub for Sri Lanka and South Asia.

“The project (is) rather not for the present, but it is more for the future generation to be born,” he said.  

(Video reporter: Tang Lu; Video editor: Ma Ruxuan)

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Source: Xinhua Headlines: 6 years on, Colombo Port City set to boost Sri Lanka’s economic growth