The “Colombo Port City” project”, largest foreign-funded investment on record in Sri Lanka commenced today (September 17) with the commissioning of construction of the Phase 1 by the Chinese President Xi Jinping and President Mahinda Rajapaksa.
The Chinese-financed $1.4 billion “Colombo Port City” project is its largest foreign-funded investment on record.
The Chinese President said yesterday in Colombo that the new Maritime Silk Route proposed by China and the Mahinda Chinthana vision were cut out for each other and would be most conducive for development of Sri Lanka, especially in port construction and development, expansion of the maritime economy and ensuring maritime security.
The Port City will be built by a unit of state-controlled China Communications Construction Co. (1800) on 233 hectares (576 acres) of reclaimed land, an area slightly larger than Monaco. The offices, hotels, apartments and shopping centres will draw as much as $20 billion in investment over about 15 years, according to ports authority chairman Priyath Wickrama.
“The government wants to convert Sri Lanka into a maritime center,” Wickrama said in an interview. “We can give some competition to Singapore and Dubai, which are running out of capacity.”
Sri Lanka will own rights to 125 hectares of the reclaimed land and 20 hectares will be held by China Communications, with the remaining 88 hectares leased to the company for 99 years.
Colombo’s port is the only one in South Asia that can accommodate 18-metre deep draft vessels, putting it in position to serve the Indian subcontinent, the Middle East and some African states, said Parakrama Dissanayake, former chairman of the Chartered Institute of Logistics and Transport in Sri Lanka.
Chinese government lending to the island nation has increased 50-fold over the past decade to $490 million in 2012, compared with $211 million combined from Western countries and lending agencies.
Unlike previous infrastructure projects undertaken by Chinese companies in Sri Lanka, the port city is financed by equity from China Communications or funds raised through it, with no commitment or guarantee from the Sri Lankan government.
Besides Sri Lanka, President Xi also visited the Maldives on this trip, which he called “an important stop of the ancient maritime silk road” in an article published in local media. Xi will travel to India tomorrow.
The Chinese President last year unveiled plans to build a maritime Silk Road, referring to an ancient series of land routes that connected China to the Mediterranean Sea, linking traders, priests, artists and explorers. Details on the project are short and may be fleshed out at the Asia-Pacific Economic Cooperation meeting in Beijing in November.