Cabinet nod for $ 1 b financial city complex

Port City land reclamation in progress 

                                                                 - Pic by Indraratne Balasuriya

By Chathuri Dissanayake 

The Government yesterday approved a proposal to sign a Memorandum of Understanding (MOU) with CHEC Port City Colombo to develop the Colombo International Financial City building complex valued at $ 1 billion on Sri Lanka’s artificial island.  

The proposal was made by the Megapolis and Western Development Ministry to sign the MOU to undertake the development of the building complex that will form part of the Colombo International Finance City. The non-binding MOU clause regarding the building states: “In the event that the GOSL shall decide to proceed with Colombo International Financial City (CIFC), the Project Company shall, subject to the successful outcome (in the Project Company’s opinion) of a technical and financial viability assessment to be undertaken by the Project Company, seek to agree with the GOSL mutually acceptable terms upon which the Project Company may undertake a development that shall form part of the Colombo International Finance City. “

Seeking approval to sign the MOU, Megapolis and Western Development Minister Champika Ranawaka says that the MOU is signed between the Ministry and China Harbour Engineering Company Ltd. and CHEC Port City Colombo Ltd. to assist the project company in obtaining the required approvals from its ultimate parent company, China Communications Construction Company Ltd, and the China Development Bank, to proceed with new Foreign Direct Investment (FDI). 

Further, it was stated the move was to meet the requirement imposed by the Chinese Government on new overseas real estate investment projects being undertaken by all Chinese companies.

According to the Megapolis Ministry, the building complex will be located on 6.8 Ha of land, and entail a FDI of approximately $ 400 million in Phase 1 and a further $ 600 million in Phase 2. The Project Company has already committed an investment of $ 1.4 billion to create the Colombo Port City landfill and related infrastructure. The first part of the FDI, amounting to $ 400 million, is expected to commence in late 2018, the Megapolis Minster told Cabinet. 

Furthermore, land identified for the development of the CIFC Building Complex will be within the Project Company’s entitlement of the first 20 Ha of marketable land selected as per Schedule 14 of the Tripartite Agreement, the proposal to the Cabinet highlighted. With 50% of the land reclamation already completed, the newly reclaimed land, including the land area allocated for the building complex, is to be gazetted under the Lands Ordinance to enable the project company to enter into a 99-year lease. However, the full reclamation of the land is expected to be completed in 2019.

The construction of the building complex is expected to commence next year after relevant Environmental Impact Assessment (EIA) approvals have been obtained. The EIA for Infrastructure Landscaping and Development on the reclaimed land has already been completed and was open for public comments until 18 December, while a final decision on the matter is expected in March next year. 

Skidmore Owings & Merrill (SOM) of the US has already been awarded the design contract of the building after being selected as the winner of a global competition to design the master plan for the development.