Sri Lanka to create international financial zone where people can also park their money

COLOMBO: Sri Lanka has come to an agreement with China to create a Colombo International Financial City (CIFC) which will not only be an international financial services center, but a place where people can park their money, the Minister in Charge of the Megapolis project, Patali Champika Ranawaka said here on Friday. 

Speaking to the media after the Ministry of Megapolis, the Urban Development Authority (UDA) and the China Harbor Engineering Company (CHEC) signed a Tripartite Agreement to set up the CIFC, Ranawaka said that parliament will soon enact the Colombo International Financial Center Law to create an “International Financial Zone” in the 269 hectares of land to be reclaimed from the sea by the CHEC.

The zone will be earmarked for international and local banking and financial service companies and will be governed by its own laws as per international best practices. The zone will provide Sri Lankans high paid service sector jobs. Sri Lankan Prime Minister Ranil Wickremesinghe had said earlier that British laws would be established  in the zone and that a British team will come to advice on this.  

In contrast to the agreement executed earlier by the Rajapaksa government, the Tripartite Agreement does not envisage outright sale of land to the CHEC or any other  foreign party, and will give land only on lease up to 99 years.

In contrast to the earlier agreement, the land area for public purposes such as parks, pedestrian walkways etc., has been increased by 44 percent from 63 ha to 91 ha. As such, the area to be reclaimed from the sea had to be increased from 233 ha to 269 ha. Therefore, the land now earmarked  for public purposes is 91 ha and for development and investment it is 62 ha.

Of the 91 ha allocated for public purposes, 45 ha has been earmarked for parks for the public. This is eight times larger than the Galle Face Green, currently the only truly public place in Colombo. Colombo,  which is on the coast, has no beach. But the project will give it 13 ha of beach for public recreation.

The Chinese project executing company will meet the full cost of the environmental studies and also give Rs.500 million (US$ 3.4 million) for a livelihood development project aimed at the fishermen affected by the reclamation work.

Minister Ranawaka also announced that the Chinese company has withdrawn its request for compensation of US$ 143 million for the disruption of work forced on it by the government in 2015. The Sirisena-Wickremesinghe government, which came to power in January 2015, wanted to have to re-assess the agreement signed by the earlier Rajapaksa regime. Work stopped in March and is to begin in right earnest only now.

The Chairman of the China Harbor Engineering Company, Tang Qiad Liang, said that as a gesture of goodwill, his company agreed to the changes sought by the new government of Sri Lanka. Tang said that his company and China see this project as a long term commitment.

China is keen on helping Sri Lanka develop into a major financial and tourist destination and not just a transit point. Tourists should stay  9 to 10 nights on an average, he said.