The much talked about Port City Project at Galle Face may resume if the concerns of the Government are addressed.
Board of Investment (BoI) of Sri Lanka Chairman Upul Jayasuriya told The Sunday Leader that the Government is not against the project but wants to ensure the project falls in line with the legal, environmental and other requirements.
He said that the Sri Lanka Ports Authority should have heeded the advice of the Attorney General (AG) that the State-owned ports operator cannot enter into commercial operations including the ambitious Port City project without the principal enactment being amended.
“The Attorney General referring to the Colombo Port City Project had categorically stated that if the Ports Authority was to engage in a commercial project of this nature, it has to be amended by Parliament,” Jayasuriya told The Sunday Leader on the sidelines of a business partnership matchmaking event titled ‘New Business Silk Road’ organised for the visiting business delegation from Qingdao on Friday.
It was pointed out by the AG’s Department that Section 6 of the Sri Lanka Ports Authority Act (No. 51 of 1979) which contained the ‘Objects and duties of the Ports Authority’, did not confer legal authority for SLPA to engage in land reclamation, property development etc.
“We are not against this project. No, we want this to happen. But our government wants to ensure good governance, transparency and rule of law. So like any other project this too has to follow the legal, environmental and other requirements required by the Law. Geological Survey and Mines Bureau had given a one day exemption for the ground breaking ceremony attended by the Chinese President. We understand that thereafter the relevant parties should have obtained necessary approvals from GSMB. The Central Environmental Authority has issued a license for a period of one year and that too had lapsed. We somehow want this project to go ahead after obtaining necessary approvals,” he added.
The Government of Sri Lanka wanted to have a proper regulatory framework which ensured consistency and uniformity within its investment climate, Jayasuriya emphasized.
“We can’t have two regimes – one under the BoI and the other under the Strategic Development Projects Act. Henceforth, we would not be awarding any concessions under the SDP Act. Whatever concessions awarded will be honoured but no future concessions would be made.”
The Strategic Development Projects Act No. 14 of 2008 as amended by the Strategic Development Projects (Amendment) Act No. 12 of 2011created far-reaching consequences which covers full or partial exemptions (depending on the type and the level of investment) of the Value Added Tax (VAT), Income Tax, Economic Service Charge (ESC), Customs Duty, Excise Duty, Nation Building Tax (NBT), Ports and Airports Development Levy (PAL) and taxes introduced under the Finance Acts.
He noted that hereafter the Cabinet of Ministers and the Treasury will only be involved in the policy making aspect with regards to investments and not with the evaluation of BoI projects.
The entire 230-hectare Port City was projected to bring in a staggering US$ 15 billion worth of investments into the country. One-third of the reclaimed land would be given to the Hong Kong-listed China Communications Construction Company (CCCC) outright whilst another 100 hectares awarded on a 99-year lease agreement with the remaining owned by the SLPA.
Following the temporary suspension of the project last March, the Court of Appeal ordered the Attorney General to inform the government’s stance on the Colombo Port City project to court on June 15.