• COPF queries expenditure and ROI

The Parliamentary Committee on Public Finance (COPF) was told the Government had spent Rs 9.7 billion to establish the Colombo Port City (CPC) project, and COPF Chairperson Dr Harsha de Silva stressed that it was the taxpayers who had borne a significant cost and the State needed to receive a return on its investment.

The CPC Economic Commission (EC) said the Government had spent Rs 9.7 billion on the project. 

Dr de Silva requested. 

The CPCEC Chairperson, President’s Counsel Harsha Amarasekera said that the Government expected to recover its expenditure when the first State-owned plot of land is sold. 

Dr de Silva sought detailed information from the CPCEC on investments attracted by the Port City, the salaries of Commission employees, the status of businesses operating within the development, and the Government’s expenditure on the project. 

During a meeting held on 8 October, COPF members questioned whether the CPCEC is adequately disclosing information on public expenditure, investment inflows and the returns generated by the Port City, given that the project had been developed using State resources. 

Opposition Parliamentarian Shanakiyan Rasamanickam questioned whether the salaries of the CPCEC’s Director of Legal Affairs and other employees are paid from public funds and requested a copy of the said Director’s salary details. He also questioned the respective roles of the CPCEC and the Board of Investment, asking how much foreign direct investment (FDI) each body had attracted and what proportion of the investment had actually entered the country in Rs or US$. 

Amarasekera said that he will give the salary details in confidence to Dr de Silva if that is required. 

Rasamanickam questioned the expenditure incurred on salaries at the CPCEC in comparison with the investments brought into the country, asking how much the Port City is costing the State and how much foreign currency it is generating. Rasamanickam also questioned the purpose of having a governing body if the COPF could not obtain information on the revenue, the activities of the businesses operating within the Port City and the land provided to Chinese investors, including whether such land had subsequently been sold. 

Dr de Silva also sought an updated list of businesses gazetted to operate within the Port City, including their current status and whether they remained active. He asked whether the businesses had invested the amounts originally proposed, recruited employees and commenced operations in accordance with their approved business plans. He also questioned how the CPCEC monitored businesses to ensure that they operated in accordance with the conditions under which they had been gazetted. Dr de Silva further sought details of the permissions granted to these businesses, the recruitment of foreign workers and the visas issued to them. He asked whether the businesses are bringing in their own employees from overseas and how the CPCEC monitored such arrangements. He also raised questions about condominium projects and foreign investment, recalling that it had previously been stated that 100 per cent of the construction costs had to be brought in as foreign currency through overseas investment and FDI.

The CPCEC said that it had been asked to provide updated investment figures for businesses operating within the Port City, details of investments in the pipeline, the current status of condominium projects and information on condominium sales. It added that annual returns are required to be submitted to the CPCEC by the end of this month (October). More information had been requested under a new schedule, and the CPCEC would be in a position to provide comprehensive details once those returns had been received.

During a presentation by the CPCEC’s Director of Commercial Operations, the Commission outlined three major projects that had been gazetted to operate within the Port City. The projects were Marina Hotels Holdings, with a proposed investment of $ 114 million; Homelands Port City, with $ 152 million; and Primewell Port City, with $ 131 million. The total investment associated with the three projects was stated to be $ 397 million.

Dr de Silva questioned whether the lease payments for the land allocated to these projects had been made in Sri Lankan Rupees and how much revenue the Government had received from the arrangements.

The CPCEC explained that the land parcels allocated to the three companies were classified as project-company marketable land. It said that the leasing arrangements for such land had been structured under the applicable mechanism, with 1% of the relevant lease and construction amounts being credited to the CPCEC Fund. The CPCEC said that the 1% payment from the three companies had amounted to Rs 398 million, which had been received by the Commission. It explained that the fund supported the CPCEC’s operations as a self-sustaining entity.