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Colombo Port City to lead Sri Lanka out of foreign exchange crisis

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The Colombo Port City Economic Commission (CPCEC) is hopeful of fresh foreign exchange inflows into China-backed multi-billion dollar Colombo Port City (CPC), leading Sri Lanka out of the ongoing forex crisis from this May onwards.

New foreign direct investment (FDI) inflows are expected from land sales and the initiation of several business operations under a centralised electronic-based business planning system. The proposed duty-free zone is also expected to increase circulation of foreign exchange in the economy.

Under the final stage of infrastructure development, the project company, CHEC Port City Colombo (Pvt) Ltd., a unit of China Communications Construction Company Limited (CCCC), is expected to invest US$ 500-600 million increasing the initial investment of the project, which included land reclamation of 269 hectares and physical infrastructure to US$ 2 billion.

Joining an online discussion organised by the Presidential Media Centre last Friday, CPC Economic Commission Acting Director and the Secretary to the Ministry of Water Supply, Dr. (Eng) Priyath Bandu Wickrama highlighted that the country’s economy will start to reap benefits of the CPC from May onwards.

Over the past three months, the CPCEC has concluded land lease agreements worth US$ 200 million with investors who have committed to make US$ 600 million worth investments. CPCEC Member, Saliya Wickramasuriya, who also joined the discussion was hopeful of US$ 600-800 million worth land sales this year.Meanwhile, Dr. Wickrama announced that the construction of the special duty-free zone within the CPC branded ‘Downtown Duty-Free’ is on track to be completed in May, which would give a boost to foreign currency circulation in the country.

“The construction of Downtown Duty-Free will be completed in May, and it will be opened for tourists and Sri Lankans returning from abroad to make purchases under the duty-free allowance structure in place which will be further enhanced. As a result, a large amount forex will be circulated in the economy,” he elaborated.A leading global duty-free operator has been chosen to manage the zone, he added not divulging the name of the operator.

The CPCEC is also gearing to launch an ‘e-Business planning system, which would enable the investors kick start business operations outside of the CPC without having to wait until the completion of their facilities in the CPC while improving the ease of doing business conditions for investors with faster registrations and approvals.

Dr. Wickrama particularly highlighted that the e-Business’ system would also allow exporters and Sri Lankan expats to repatriate and manage foreign currency earnings under improved conditions.

Wickramasuriya noted that Sri Lankan migrant workers would be given special benefits to remit and invest their foreign currency earnings in the CPC, which would enable the Central Bank (CB) to rebuild the dwindling forex reserves.

“We are planning to provide special benefits. Those inflows would directly go into the forex reverses supporting to resolve our forex issue in the short-term,” he stressed.(NF)

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