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Ernst & Young facilitates a briefing on Port City Colombo

02 Aug 2021

  • For Commercial Officers at Sri Lanka missions overseas 
A webinar brief on Port City Colombo, for the officials at the Department of Commerce and the Commercial Officers attached to various Sri Lanka missions overseas, was successfully facilitated and hosted by Ernst & Young recently.   The Department of Commerce (DOC), which operates under the purview of the Ministry of Trade, plays a key role in the overall conduct of Sri Lanka’s foreign trade relations at bilateral, regional, and multilateral levels.  The staff of the DoC and of missions based globally across the West and East participated in the session, which extensively spoke on the Colombo Port City Economic Commission Act which was passed in parliament in May 2021. The Acting Director General of Commerce Ananda Dharmapriya made the opening remarks by recognising the timely importance of the topic . Ernst & Young TAX Principal Shehani Paranavitane explained the Act and the vast opportunities it offers in terms of fiscal and other exemptions to foreign investors investing in Port City Colombo. CHEC Port City Colombo Director Sales and Marketing Yamuna Jayaratne detailed out the unveiling investor opportunities within the Port City Colombo.   During her presentation, Jayaratne explained how the idea of Port City came about back in 2010 as an outcome of Colombo South Port Expansion. The environmental impact assessment study that was conducted back then in 2006/07 concluded that the expansion of the southern terminal will create a natural sand settlement on the shadow of the southern terminal. Taking this study into consideration as well as the requirement to expand the Colombo Business Core, the concept of creating an artificial land towards the sea just south to Colombo Port was generated.  Further, in her presentation Jayaratne clarified that the Government of Sri Lanka (GoSL) holds freehold title for the entire 269 hectares of the reclaimed land. The key responsibilities of the project company (CHEC Port City Colombo) under the tripartite agreement is to completely invest and construct the reclaimed land, the breakwater, as well as the infrastructure that will go into the reclaimed land. An estate management company will be formed as a joint venture of the GoSL and the project company which will undertake all maintenance activities of the common areas, the parks, the roads, and common facilities of this masterplan city. Port City, being a master planned city, will feature exemplar public facilities such as a 2 km beach, a lush green tropical park connected to a network of secondary parks, and a well-connected internal road network which will be green lined with dedicated bicycle lanes. Port City also features an internal saltwater channel that runs across the entirety of the reclaimed land.  Other strategically important infrastructure projects that will immensely benefit Sri Lanka slated to be built within Port City would be the International multipurpose Exhibition and Convention Centre. This facility is expected to contribute greatly in attracting MICE events and being a catalyst in the growth of MICE tourism in the country. There are also plans to establish an International Health Care Facility with a brand of global repute for excellence in health care. This would contribute to the growth of medical tourism into the country as well as curb the outflow of funds out of the country spent on international medical care. The internal school slated to be established within Port City is also expected to be an educational facility with a brand of global repute. It is expected that this would serve to drive demand for residential property from the region and would be a catalyst in attracting high net worth individuals (HNIs) with the capacity to invest within Sri Lanka. Strategic developments such as the marina will also connect this Island nation to a global community with the capacity to invest within Sri Lanka. Port City Colombo provides a world class city not only for Sri Lanka but for the whole of South Asia. These sentiments were echoed by Ernst & Young Partner and Head of TAX Duminda Hulangamuwa who mentioned: “We firmly believe that Port City will be a significant catalyst in propelling Sri Lanka's growth into a new future. We are the second most connected nation in South Asia, and Port City provides the right environment and the right framework now to really be attractive and bring a compelling value proposition for investors. The support of the foreign emissaries and the foreign missions placed overseas will play an important role in promoting the port city as an investment destination and we must collectively realise this by working together with all entities.”   Explaining on the Colombo Port City Economic Commission Act. No. 11 of 2021 (“The Port City Act”) Paranavitane of Ernst & Young highlighted that with the enactment of the Port City Economic Commission Act, the framework is in place in terms of ease of doing business, tax concessions, safeguarding of investor capital, and on expedited dispute resolution mechanisms.  Paranavitane explained that the intention is for this zone to be an international business and service hub with specialised infrastructure to promote key economic activities especially in relation to international trade, shipping logistics operations, offshore banking and financial services, IT and BPO, corporate HQ operations, regional distribution operations, and tourism and entertainment.  Whilst a key requirement for any potential investor is the need of having to have foreign currency, there is opportunity for local investors without foreign currency to be a part of an investment within the Port City. Furthermore, Paranavitane also elaborated on exemptions that are granted for Businesses of Strategic Importance that could be availed up until a maximum period of 40 years and many other benefits that have been stipulated within the framework.  Adding even more on “why Port City Colombo has potential”, Paranavitane brought in a snippet of EY study of special economic zones in ASEAN as a comparison and highlighted the vast opportunities that could be created within the framework of the Port City law, leading Port City to be a successful multi-services hub in the region. 


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