Colombo to be South Asia’s commercial hub
Sri Lankan capital Colombo is the most suitable to be South Asia’s commercial hub, says Liang Thow Ming, Chief Marketing Officer of the US$ 1.4 billion Colombo Port City project being executed by the China Harbor Engineering Company (CHEC).
Liang told this correspondent 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 (now renamed Colombo Financial 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 Indian Market
However, the Financial City will be primarily serving the Indian market which is the single largest in the total South Asian market of 1.7 billion people, Liang said.
“Indians who want to park funds abroad could do it in the Colombo Financial 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.
He said he has met Indian entrepreneurs and even addressed the association of top Indian real estate developers at their conference held in Shanghai. The delegates expressed an interest in knowing more about the project. Liang also met the former Indian Deputy External Affairs Minister Shashi Tharoor, an ardent advocate of India-China cooperation.
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 out of which 100 to 200 may be able to raise US$ 200 million, he estimated.
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.
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.
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 per cent 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 70 people out of whom, 50 are Sri Lankans or of Sri Lankan origin; 10 are Chinese nationals and another ten are from 15 different 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.
However, the Port City project faces challenges and some uncertainties as it aims to develop an autonomous business system within Sri Lanka, Liang said.
There is anxiety about the stability of the Sri Lankan government’s policies, which is understandable given the stoppage of the project after the government changed. The second anxiety is over implementation of policies which must be consistent. And thirdly, the new laws for the city will have to be drafted carefully and unambiguously, Liang said. (NIE)