Cabinet had approved a proposal presented by Prime Minister Mahinda Rajapaksa in his capacity as Finance, Economic Affairs and Policy Development Minister, which gives Prime Minister’s Secretary Gamini Senarath the authority to appoint a committee to evaluate the appropriateness and feasibility of the CIFC.
Eight members will be appointed to the committee. There will be two experts to evaluate the legal implications, and one each to consider the economic aspect, urban development scope, study the engineering proposals, and consider the provincial regulatory and administrative impact of CIFC.
An expert will also be added to the committee to analyse the financial and commercial department, along with a professional to look into the possible sociological impact of the project, according to the Cabinet paper.
However, Cabinet Co-spokesman Ramesh Pathirana told Daily FT that the Government was not considering a significant change to the existing proposal to establish CIFC but the review was to understand the work already carried out and how best it could be used for Sri Lanka’s development. Cabinet approval was also given to construct a $1 billion building complex to house the CIFC in December 2017.
“In 2014, Colombo Port City development project was commenced by the Ports Authority with CHEC Port City Colombo Ltd., as a private sector investment. After 8 January 2015, the original scope of the project has been changed as the “Colombo Financial City” and a bill has been prepared under the directions of the legal draftsman and assistance of external consultants to set up a special economic zone “Colombo Financial City.”
“The Cabinet of Ministers approved the proposal presented by Prime Minister to appoint a committee of experts in the respective fields to review the amended scope of the project and procedure used to revise the project,” the Cabinet paper said.
The evaluation committee appointed by Prime Minister Rajapaksa’s Secretary will focus on the work done by the legal division headed by former Attorney General Yuvanjana Wijethilake with a cadre of supporting staff, which was appointed by the previous administration. It was earlier under the purview of former non-Cabinet Minister Dr. Harsha de Silva.
The committee was responsible for figuring out how the CIFC could function under its own economic and commercial laws, to facilitate operations of global multinational corporations and grow as a business and financial hub. It was planned to be similar to the financial centre in Dubai, which operates under British law, while the rest of the country operates under the law of the United Arab Emirates (UAE). However, the effort ran into multiple delays, as it was necessary to focus on the modalities of how two legal systems would function side by side.
In September the Attorney General issued recommendations on the proposals drafted by Wijethilake. They contain the establishment of a Colombo Financial City Commission, a financial services department under the Commission, an advisory committee, arbitration board, Colombo Financial Court, and regulations to govern CIFC. These will now be reviewed by the committee appointed by Prime Minister Rajapaksa’s Secretary.
The Port City is made up of 269 hectares of reclaimed land, which has now been officially vested as part of Sri Lanka. Of the 269 hectares, 116 hectares belong to China Communications Construction Company (CCCC), which is the parent company of China Harbour Engineering Company (CHEC), on a 99 year lease. The remaining land is owned by the Sri Lankan Government, and will be divided up into 62 hectares, to be used to set up a financial city, and 91 hectares to be used as public spaces.