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Groundbreaking Port City Financial Centre in ‘few months’ 

11 Nov 2021

 
  • Phase One to be completed by 2025/26
  • Entire project to have five towers including office, residential 
  By Shenal Fernando  The groundbreaking ceremony of Phase One of the highly publicised Colombo International Financial Centre (CIFC), which is the first development project in Colombo Port City, is expected to be carried out within the next few months.  Speaking to The Morning Business on Wednesday (10), CHEC Port City Colombo (Pvt.) Ltd. (CPCC) Director – Sales and Marketing Yamuna Jayaratne claimed: “All preplanning and design finalisation for the project is progressing as planned and we are looking at completing the ceremonial groundbreaking CIFC Phase One within the next few months.”  The CIFC Mixed Development Project comprising a total land area of 6.8 ha is expected to require a total investment of $ 1 billion and will involve the incorporation of a special purpose vehicle (SPV) company, jointly managed by Browns Investments, the strategic investment arm of the LOLC Group, and China Harbor Engineering Co. Ltd. (CHEC).  CPCC Head – Public Relations Kassapa Senarath stated: “The entire project will involve five towers; one office tower and two residential towers under Phase One and Phase Two will involve two mixed development towers.” Phase One of the CIFC Mixed Development Project, which will comprise a land area of 3.06 ha, will involve an investment of $ 450 million and according to Jayaratne, the estimated timeline for the completion of Phase One of the CIFC project is 2025/26.  Explaining further, Jayaratne stated that while it is too early for the CIFC project to enter into any firm agreements with potential tenants, “based on inquiries received we can confidently state there is firm interest expressed by many companies. The key catalyst driving such interests are the advantages that service sector companies can enjoy when establishing within the Port City as per the framework of the recently enacted Port City Special Economic Commission Act”. She further stated: “Any company looking to establish operations in the interim period prior to the CIFC towers coming up may set up within a designated location in Colombo. These companies would be required to locate physically within the CIFC Phase One building once completed. With a framework law in place geared to improve the ease of doing business and robust investment protection, supported by the world class infrastructure within a master planned city coupled with our locational advantage, makes the Port City Special Economic Zone a very attractive option for services sector companies.”  The “Port City Colombo Development Project” (PCCDP) commonly referred to as Port City developed by the CPCC is the country’s first service-oriented Special Economic Zone (SEZ) and is a reclaimed island located adjacent to Galle Face Green, Colombo.  This project carried out under a public-private partnership (PPP) arrangement between the Government of Sri Lanka and CPCC involved an initial investment of $ 1.4 billion to reclaim 269 ha of land, of which CPCC obtained 116 ha, under a 99-year leasehold.  With the enactment of the Colombo Port City Economic Commission Act No. 11 of 2021 in May, and the subsequent establishment of the Port City Commission, the framework necessary to attract investment to the Port City Project was established. Accordingly, many local businesses have indicated interest in investing in the 74 marketable blocks of land available within the Port City, which will be sold over several phases.  Despite the involvement of local investors in such projects, under the Colombo Port City Economic Commission Act, the financing for such projects must be raised overseas, thereby ensuring inflow of foreign exchange to the country. Jayaratne noted: “We have already concluded transactions for six parcels of land, the first of which is the CIFC Phase One project. It has garnered an investment of approximately $ 450 million. Supported by encouraging interest towards the project following the enactment of the Port City Economic Commission Act, and introduction of the Special Economic Zone framework, we could expect a steady inflow of FDIs (foreign direct investments) in time to come.”  She further stated that currently they are aggressively promoting only the parcels of land that can enhance the value proposition at Port City. However, if there is interest from investors that extend beyond the immediate strategic parcels that are being promoted, they are very open to further discussions. According to a recent report by PricewaterhouseCoopers (PwC), a fully operational Port City will contribute $ 13.8 billion to the country’s economy. Moreover, in May 2021 then State Minister of Money and Capital Markets and State Enterprise Reforms and current Central Bank Of Sri Lanka (CBSL) Governor Ajith Nivard Cabraal stated in Parliament that the Port City would add around $ 4.5 billion to the country’s economy annually within the first few years itself.  PwC further claimed in its report that the 20-year Port City project will attract as much as $ 12.7 billion in additional investment.  The newly established Port City Commission is expected to serve as the single window facilitator for any investor or business looking to set up within the Port City and shall be entrusted with the governance of Port City Colombo. As per Jayaratne, the Commission is currently focused on “ensuring that regulations for activities within the Port City Special Economic Zone slated to be positioned as a multi-services hub, are developed”.

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