E&Y insights to Port City Colombo for Commercial Officers at Sri Lankan missions overseas 

A webinar to brief the officials at the Department of Commerce and the Commercial Officers attached to various Sri Lanka missions overseas on Port City Colombo was successfully facilitated and hosted by Ernst & Young (E&Y) recently. 

The Department of Commerce (DoC), which operates under the purview of the Ministry of Trade, plays a key role in the overall conduct of Sri Lanka’s foreign trade relations at bilateral, regional and multilateral levels. 

The staff of the DoC and missions based globally across the West and East participated in the session which extensively spoke on the Colombo Port City Economic Commission Act, which was passed in Parliament in May. Acting Director-General of Commerce Ananda Dharmapriya made the opening remarks by recognising the timely importance of the topic.

E&Y Principal - TAX Shehani Paranavitane explained the Act and the vast opportunities it offers in terms of fiscal and other exemptions to foreign investors investing in Port City Colombo. CHEC Port City Colombo Director Sales and Marketing Yamuna Jayaratne detailed the unveiling of investor opportunities within the Port City.

During her presentation, Jayaratne explained how the idea of Port City came about back in 2010 as an outcome of the Colombo South Port Expansion. The environmental impact assessment study that was conducted back then in 2006/07 concluded that the expansion of the southern terminal will create a natural sand settlement in the shadow of the southern terminal. Taking this study into consideration as well as the requirement to expand the Colombo business core, the concept of creating an artificial land towards the sea just south of the Colombo Port was generated. 

Further in her presentation, Jayaratne clarified that the Government holds a freehold title for the entire 269 hectares of the reclaimed land. The key responsibilities of the project company (CHEC Port City Colombo) under the tripartite agreement is to completely invest and construct the reclaimed land, the breakwater, as well as the infrastructure that will go into the reclaimed land. An estate management company will be formed as a joint venture of the Government and the project company, which will undertake all maintenance activities of the common areas, the parks, the roads, common facilities of this master plan city

Port City, being a master-planned city, will feature exemplar public facilities, such as a 2 km beach, a lush green tropical park connected to a network of secondary parks, a well-connected internal road network, which will be green-lined with dedicated bicycle lanes. Port City also features an internal saltwater channel that runs across the entirety of the reclaimed land. 

Other strategically important infrastructure projects that will immensely benefit Sri Lanka slated to be built within Port City will be the International Multipurpose Exhibition and Convention Centre. This facility is expected to contribute greatly in attracting MICE events and being a catalyst in the growth of MICE tourism in the country. 

There are also plans to establish an International Healthcare Facility with a brand of global repute for excellence in healthcare. This would contribute to the growth of medical tourism into the country as well as curb the outflow of funds out of the country that is spent on international medical care. The internal school slated to be established within Port City is also expected to be an educational facility with a brand of global repute. It is expected that this would serve to drive demand for residential property from the region and would be a catalyst in attracting high net worth individuals (HNIs) with the capacity to invest within Sri Lanka. Strategic developments, such as the Marina, will also connect the island nation to a global community with the capacity to invest within Sri Lanka.

Port City Colombo provides a world-class city not only for Sri Lanka but for the whole of South Asia. The first-world state-of-the-art infrastructure, unparalleled aesthetic appeal, its focus on sustainability coupled with first world administrative efficiencies and globally competitive incentives and investor-friendly policies would prove to be a significant catalyst in the development of the country. 

These sentiments were echoed by Partner, E&Y Colombo Head of TAX Duminda Hulangamuwa, who mentioned: “We firmly believe that Port City will be a significant catalyst in propelling Sri Lanka’s growth into a new future. We are the second most connected nation in South Asia, and Port City provides the right environment and the right framework now to really be attractive and bring a compelling value proposition for investors. The support of the foreign emissaries and the foreign missions placed overseas will play an important role in promoting Port City as an investment destination, and we must collectively realise this by working together with all entities.”

Explaining the Colombo Port City Economic Commission Act. No. 11 of 2021 (‘The Port City Act’), Paranavitane highlighted that with the enactment of the Port City Economic Commission Act, the framework is in place in terms of ease of doing business, tax concessions, safeguarding of investor capital and on expedited dispute resolution mechanisms. 

Paranavitane explained that the intention is for this zone to be an international business and service hub with specialised infrastructure to promote key economic activities especially in relation to international trade, shipping logistics operations, offshore banking and financial services, IT and BPO, corporate HQ operations, regional distribution operations and tourism and entertainment. 

Whilst a key requirement for any potential investor is having foreign currency, there is an opportunity for local investors without foreign currency to be a part of investments within Port City. Furthermore, Paranavitane also elaborated on exemptions that are granted for businesses of strategic importance that could be availed up until a maximum period of 40 years and many other benefits that has been stipulated within the framework. 

Adding even more on why Port City Colombo has potential, Paranavitane brought in a snippet of an EY study of special economic zones in ASEAN as a comparison and highlighted the vast opportunities that could be created within the framework of the Port City law, leading Port City to be a successful multi-services hub in the region.