View of Colombo Port City by the sea, Beautiful Sri Lanka’s Upcoming Financial Hub
View of Colombo Port City, Beautiful Sri Lanka’s Upcoming Financial Hub

Sri Lanka, the Pearl of the Indian Ocean, is a land of beauty that attracts millions of tourists each year. However, this splendid island is still a developing nation. The vibrant city of Colombo, which is also the commercial capital of Sri Lanka remains the central hub of all these evolvements. Besides, this city of glamour is about to grow in size, structure, and success. Yes, you guessed it right! It happens with the project of the Colombo Port City, which is assumed to be the wonderful gateway that links this delightful island to South Asia. Thus, there is no doubt that many across the world pay special attention to this significant project, which is to change the direction of Sri Lankan tourism, as well as the economy. Thus, we thought of sharing all about this project with you. Here we go!

What is the Colombo Port City Project?

Colombo port city project builds as a brand new city development extension of the existing Colombo CBD (Central Business District). Building a world-class city for South Asia is the vision of this project. Besides, its mission is to develop the most habitable city in South Asia, built on feasible values, healthy surroundings with future-oriented infrastructure to improve comfortable living.

A flawless city must be able to supply the highest quality education, medical, commercial, and entertainment opportunities. And this developing city is a fine example of that. The Colombo port city motivates the growth and acts as a place where the nation’s culture and energy blend with international best practices.

Further, the CHEC port city Colombo private Ltd (China Harbor Engineering Company) invests in the Colombo Port City project. CCCC (China Communications Construction Company) owns the CHEC. However, the CCCC remains the world leader in port designing and construction. Moreover, it leads the whole world in the construction of cranes and heavy machinery, and thus, its contribution to this project is going to be highly significant.

Besides, the reason for selecting the current location to build the Colombo port city is its position against the 2.5 km long Colombo South Port breakwater. The company took advantage of breakwater construction while building the prime land. Moreover, breakwater acted as a natural location for sand accumulation. Furthermore, the project intends to expand to the Colombo Business District of Colombo 01. The objective of it is to promote the Colombo International Financial City (CIFC). However, the expansion of Colombo’s central business city would not be possible in any other location other than this area due to lack of space. The real estate of Colombo central business city at the oceanfront proves to have the highest demand in the aspects of businesses and residents.

Who Owns Port City?

Urban Development Authority or any other agency nominated by the government of Sri Lanka shall have the ownership of all the land reclaimed by the project company. 269 Ha of land reclaimed in total while approximately 178 Ha of the land from the total land can be marketed. These marketable lands are divided between the government of Sri Lanka and the Project Company. Accordingly, 116 Ha of land is for the Project Company while 62 Ha of land is for the Government of Sri Lanka. However, the government of Sri Lanka owns the remaining 91 Ha of land (common area). This common area consists of roads, parks, etc. But, the common area does not include beaches that are 13 Ha in size and 80 Ha of waterways.

Consequently, in order to recover the investments, the company can enjoy commercial benefits from 43% of the land claimed again. Besides, the Sri Lankan government is going to lease 116 Ha of saleable land to the project company for 99 years. This will give the Project Company the authority to lease these lands to a third-party developer for 99 years if needed. The CPCC will invest nearly 1.4 billion American dollars (210 billion rupees) over this project. Thus, it makes this project the largest FDI project in the history of Sri Lanka so far. However, this statistic does not include the additional investments to be made once the land is claimed back. In the same way, CHEC Port City Colombo private limited allocated 500 million rupees fund to the port city project. Accordingly, the proposed scheme shall operate for 3 years.

Impact of Colombo Port City

This project aims to obtain around USD 4.6 billion of positive impact on the balance of payments (BOP) of the country per annum after reaching its normal operating level in 2041. In addition, research conducted by PricewaterhouseCoopers (PwC) shows that the above-mentioned amount can be earned through net foreign exchange revenue from the industries related to tourism and export services such as information technology, logistics, maritime, and other specialized services. Furthermore, the port city project has the following basic three distinct stages.

  1. Reclamation, development of infrastructure, and lease of land
  2. Construction
  3. Operation

The influence of this project varies on a larger scale certainly. According to the PwC, the impact of Colombo port city can be of the following three types.

  1. Direct
  2. Indirect
  3. Infuse

However, a considerable impact will happen to several sectors of the country as a result of these forms. So, let us now walk through several fields that the Colombo port city would impact on.

Impact on Sri Lanka’s Economy

According to the World Bank, Sri Lanka is a lower-middle-income country when compared to the neighbouring countries. But, it has high human development indicators such as life expectancy, adult literacy, gender equality, etc. Besides, Sri Lanka has nearly USD 82 billion gross domestic product (GDP). Since the beginning of an agricultural-based economy, Sri Lanka underwent a significant restructuring up to the present service-based economy. Even though Sri Lanka is blessed with pristine beaches, snow-capped mountains, lush rainforests which attract tourists all over the world, the poor infrastructure in the country stands as a key obstacle. But, with the construction of Colombo port city, tourists will definitely have a brilliant place to perform their shopping and recreational options within the city of Colombo. Furthermore, Colombo port city will act as a high-end real estate for tourists. Besides, it will definitely be a prestigious spot for foreign high net-worth individuals.

Employment is another key factor that influences the economy of a country. The PwC evaluated the following factors at different stages of the project.

  1. Potential employment
  2. Balance of payment impact
  3. Foreign indirect investments
  4. Government revenue
  5. Value addition

After a full analysis of the above factors, they found that the Colombo port city will generate 175,000 jobs during the construction and 200,000 jobs during the operational stages. Thus, this would be one of the best solutions for unemployment in Sri Lanka.

Impact on Sri Lanka’s Political Sector

With the end of the civil war in Sri Lanka in 2009, the country needed a helping hand to rise up again. Consequently, China stood with Sri Lanka ultimately for giant development processes when the West turned back. Besides, China helped Sri Lanka with $37 million in military aid, radar systems, anti-aircraft guns, and F-7 fighter jets, broadening the political relationships. Later, China came up with the miraculous Colombo port city project which will benefit the country in the future. However, with the beginning of a number of projects at the port city, foreign employees will get the chance to work in Sri Lanka in addition to the local employees. This will definitely help to strengthen the political relationships between a number of countries.

The Socio-Cultural, and Environmental Impact

The Colombo port city project is an eco-friendly project. Moreover, it is established in a sustainable zone. The project adheres to the concept of sustainable development by respecting the following social values.

  1. Respecting the local diversity
  2. Conserving resources while project implementation
  3. Reducing the pollution
  4. Improving the environment

Furthermore, the port city helps to uplift another important aspect, which is knowledge transfer. When the foreign employees arrive in Sri Lanka, they come up with state of art technology and knowledge. Hence, the local employees get the chance to share them with the exposure they gain. This will definitely improve the income-generating capability and productivity of local employees and their social status too.

Even though these major sectors would be heavily affected by the construction of Colombo port city, the impact of the port city would definitely be spread widely over areas throughout the country in more or less.

Colombo Port City Opening Date

Colombo port city project initiated with the land reclamation work in the year of 2016. Later, the commencement of development work started in 2018. Besides, the completion of reclamation work and marine structure took place in 2019. Throughout 2020, phase 1 of infrastructure work was completed as planned at the beginning. However, in 2021, the project company budgeted to accomplish the beach, marina, and central park. Moreover, the project company has planned to conclude CIFC phase 1 along with the first hospitality plot in the year 2023. The completion of the school, health care facility and convention centre is going to happen during the years 2024 and 2025. Thus, the project company plans to complete the Colombo port city project in 2041.

Unfortunately, the unexpected outbreak of Coronavirus has become a great challenge in achieving these timeline goals as of today. The virus has hit hard in Sri Lanka at present and the pandemic is out of control now. This makes it really hard to work according to the plan described above. In the same way, China itself is also facing the same problem at present. By looking at this situation we assume that there will be a drastic change in the Colombo port city opening date as this directly affects the timeline of the project. However, along with the timeline crisis, many other unexpected subproblems can also arise in a situation like this. Hence, the probability of opening the Colombo port city around the year 2041 is now in very low condition.

The Bottom Line

Along with its significant impacts on various aspects, the Port City is to emerge in Sri Lanka, as a world-class city. Thus, the glamour it would add to the delightful city of Colombo, as well as to the magical teardrop island of Sri Lanka is sure to be impressive beyond words. And why not? The Colombo Port City is also to become the major attraction of South Asia, within the years to come. So, with all these fascinations bundled together, Sri Lanka will certainly shine more brightly in the world of tourism. And yes, make sure you visit Comlobo Port City, once it is opened. Happy and Safe Travelling!