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Port City yet to attract investment, incentives for businesses not known
View(s):CHEC Port City Colombo (Pvt) Ltd has attracted “zero” foreign direct investments (FDI) since 2021 into the prime property that it is managing because the Government has still not gazetted the legally mandated incentives and exemptions to be granted to businesses, authoritative sources said.
The last FDI into Port City was when Browns Investments PLC (BIL) in December 2021 paid US$ 114mn for 99-year leases on six parcels of land in the reclaimed property. The company said it would spend a further US$ 86mn in the next two years on development.
However, there has been no activity on these plots. Like others, BIL was hampered by the absence of incentives and exemptions that it could market to foreign investors, the sources said. The subject was under the Ministry of Enterprise Development headed by President Ranil Wickremesinghe.
This week, it was announced that Asiri Port City Hospital Ltd had entered into an agreement to lease land with the Colombo Port City Economic Commission (CPCEC). While this was portrayed as an investment, it was merely an undertaking to enter into a contract with the Commission to lease land, the sources pointed out.
The Colombo Port City Economic Commission Act passed in 2021 allows for the identification of Businesses of Strategic Importance (BSIs) by the Commission in consultation with the President or relevant Minister. These entities will be granted exemptions or incentives in accordance with regulations made under the Act. They shall be valid for at least 40 years.
While several other regulations have by now been gazetted, the legal clauses related to BSIs are yet to be operationalised. This meant that it could not be explained to investors – who are expected to make 100 percent foreign investment and not borrow from Lankan banks – what their incentives and exemptions will be.
In December last year, the Government gazetted regulations to fully permit the registration of offshore companies in Port City. And guidelines for businesses to obtain operating licences were published in late September. But application forms for the registration of such businesses with the Registrar-General of Companies (RGC) were several weeks later.
Also last year, the Central Bank of Sri Lanka authorised a special class of bank account called the Colombo Port City Investment Account exclusively to carry out business in the Port City Special Economic Zone (SEZ).
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