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Home Around South Asia

Colombo most suited to be South Asia’s commercial hub: Port City official

Editor by Editor
March 30, 2017
in Around South Asia, Around The World, China, India, Sri Lanka, Top Story
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EXCLUSIVE

By P.K.Balachandran

Colombo, March 30 (newsin.asia): Sri Lankan capital Colombo is the most suitable to be South Asia’s commercial hub, says Liang Thow Ming, Chief Sales and Marketing Officer of the US$ 1.4 billion Colombo Port City project being executed by the China Harbor Engineering Company (CHEC) .

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Speaking to this correspondent on Thursday, Liang said that Colombo is not only South Asia’s cleanest and the most livable city, it is also the capital of a country which has no quarrels with any of the nations in South Asia.

That makes Colombo an ideal place  to create and run a regional commercial hub, he added.

People from all parts of South Asia can come to Sri Lanka and do business here without issues relating to their nationality, Liang pointed out, in a veiled reference to problems between India and Pakistan which hinder free movement of goods, services and people between the two countries.

In fact, from the general acceptability point of view, Colombo could be the “Singapore of South Asia”, Liang added.

A Singapore national of Chinese origin, Liang said that the Colombo Port city  will be an international commercial and financial hub with its own legal system based on the British model and labor laws attuned to the needs of modern businesses. It will have investments from all parts of the world and not necessarily from China.

Serving the Region

However, the Port City will be primarily serving the South Asian region which has a combined market of 1.7 billion people, Liang said.

“Indians who want to  park funds abroad could do it in the Colombo Port City, rather than in Dubai or Mauritius, as Colombo is the nearest and also culturally compatible,” he noted.

Asked about India’s opposition to the project on security grounds, especially after the visit of Chinese submarines in 2014, Liang said that India has since dropped its opposition because Indian businessmen and government officials have realized that the Port City is nothing but a commercial venture in which Indians are welcome to invest.

Bird’s eye view of the early stages of the Colombo Port City project

According to Liang, it would cost a company about US$ 200 million to invest in land, buildings and business in the Colombo Port City. There are about 1000 top Indian developers, some of whom may be able to raise US$ 200 million, he said.

However, the question is whether it will be worthwhile for them to shift to Colombo from India or Dubai to Colombo, Liang said. According to the Chinese Ambassador in Sri Lanka, Yi Xianliang, four or five top Indian companies have expressed an interest in investing in the port city, but he would not name them.

Following the Sri Lankan Presidential election in January 2015,  in which the incumbent President, Mahinda Rajapaksa, who initiated the Port City project, was defeated, the new government stalled work on it for a few months to investigate some charges and also to  negotiate the terms.

But after the modification of the terms, work is  “going full steam ahead”, Liang said.

The Port City has just re-started reclamation work, but marketing of the project is also being done in right earnest simultaneously, he added. There has been no advertising but potential investors are being contacted and engaged. Liang himself had addressed a gathering of top Indian real estate developers at their convention in Shanghai and they were keen on knowing more about the Colombo project. He met the former Indian junior Minister of External Affairs, Shashi Thaoor, a strong advocate of cooperation between India and China which he encompasses in the concept of “Chindia”.

The Project

The Colombo Port City project envisages the reclamation of 269 hectares from the sea south of the Colombo harbor opposite Galle Face. Reclamation is expected to be completed in two or two a half years. In 2018, the eastern side will have been reclaimed. The reclaimed portion, divided into blocks, will have all modern infrastructural facilities so that the buyer or investor can just plug in start his operations, Liang said.

The mini city will have offices, 21,000 residential apartments, four sites for hotels,  parks,  a marina, and entertainment facilities. There will be no fancy attractions of the kind Dubai boasts of, but it will be a world class Smart City, Liang said.

Land reclamation is on at the Colombo Port City

Step by Step Watching the Bottom Line

The port city will not be built not all at once, but in phases stretching over 30 years, Liang said.

Eventually, there will be 71 plots with two or three being readied for sale every year. The plots will be sold to investors from Sri Lanka and overseas in stages as per a business plan. The Port City  authority will be watching the venture’s bottom line constantly, as it is essentially a business enterprise.

The Port City will be 20% less in size than the Marina Bay in Singapore, and is expected to have a fixed population of 80,000 and a floating one of 220,000.

Its financial laws will be based on the British model. It will have its own courts but with Sri Lankan judges. Labor laws too will be international in nature. According to Liang, stringent international labor laws will not be an issue as the Port City will be providing opportunities to Sri Lankans to work in an international environment at higher wages,  and that, at their very door step. As it is, enterprising Sri Lankans are seizing similar opportunities provided by countries in the Middle East and West.

Quashing propaganda that Chinese funded projects use mostly Chinese labor, Liang said that the Port City project currently employs 5000 people. The CHEC itself has 70 people, of whom 50 are Sri Lankans or of Sri Lankan origin. Others are from a variety of countries.

Relations with Sri Lankan Government

Since the Port City is a collaborative venture of the CHEC and the Sri Lankan government, the 269 hectares of reclaimed land will be divided between them.  The government will get 153 ha and the CHEC 116 ha on a 99 year lease. Both are expected to make money from the lands allotted to them.

The Port City will be dependent on the Sri Lankan authorities for power and water. In this context, Liang welcomed the development of the Western Province though the multi-billion dollar Megapolis project as it will vastly improve the Port City’s hinterland.

Challenges

However, the Port City project faces challenges as it aims to develop an autonomous business system within Sri Lanka.The company is studying current proposals to make it a Smart City and is in discussion with the government to strengthen and create stable economic policies which would set up a good environment for investors , Liang said.

(The featured image at the top shows Liang Thow Ming, Chief Sales and Marketing Officer of  the China Harbor Engineering Company’s Colombo Port City Project)

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