PM goes to China :
Port City project balances India, China
 The
final preparations were being made for signing the tripartite agreement
between the Colombo Port City, the Megapolis authority and, the Urban
Development Authority with legal, operational and management teams going
over the nitty-gritty of this bulky document with a fine tooth comb;
but, the Chief Marketing and Sales officer for Colombo Port City was a
thousand miles away attending the 16th National Convention of the
Confederation of Real Estate Developers Association of India (CREDAI),
Shanghai, China.
The conference had over 800 member developers, experts from the real
estate sector and senior professionals from the world of finance
attending. Participants from ancillary industries included CEOs from the
Prestige Group, Magarapatta, Rustomjees, Vascon, and Sigmaone; while
well known celebrity, Bollywood actor Sanjay Dutt had also been present
to lend some colour to the event.
The three-day convention had an apt theme, ‘Embracing Change’ and a
press release from the Consulate General of India in Shanghai said “it
was aimed at facilitating knowledge and learning global best practices
in the industry against the backdrop of the largest developing and
competitive economies - China and India.”
The Indian Consulate further said that the Chinese experience of real
estate and infrastructure development was a key learning objective for
the participating delegates.
 |
|
Construction work on the
Colombo Port City project will be relaunched soon. |
An exclusive international business forum for a business-to-business
interaction was part of the Conference, where Indian companies were
given the opportunity of interacting with 50 Chinese vendors. On the
other side of the coin, Marketing Chief Liang Thow Ming had got the
opportunity to promote the Colombo Port City to approximately 800 top
real estate developers in India.
Liang was also a part of an elite panel which discussed the topic
‘India and China – Economic Adversaries or Allies’. The debate, which
was the main highlight on the 2nd day of the conference, had been based
on current social economic conditions of the two nations, which were
unfolding powers holding the key to the future.
Whilst promoting the Colombo Port City, Liang had shared insights
into the rapid growth achieved by China’s real estate fraternity. The
decision to participate in NATCON is especially significant as CHEC
Colombo Port City had made it clear that the Port City was an
international project and the Chief Sales and Marketing Officer had also
made a visit to India in May this year to scout for investors in the
Indian real estate industry.
The special session which was moderated by Irfan Razak, Chairman of
CREDAI, had taken a comparative look at the growth of the two largest
economies, their achievements, potential for growth in the next few
years and the lessons each had learnt from one another to reach new
heights in economic growth, while creating real estate that is
complementary to the economic future of the two countries.
This clearly shows that although we might be getting various signals
from the Indian quarter in Colombo, the case was not the same in the
city of Shanghai, where India seemed to be very much in the mode of
cozying up to China. The two largest nations in the world had sat down
to talk business and their theme was more of a beacon for embracing
change together.
Counter-arguments
This signal is of particular importance to Sri Lanka since the
Chinese company had clearly stated that the Colombo Port City was not a
Chinese cantonment but was going to be an international city. In line
with this thinking, one of first nations, the Port City looked towards
to market, their not yet reclaimed land, was India.
While their massive plans to make it into an international financial
city takes priority; the second layer of marketing is to create a
livable city within a 269 hectare block of land, which would be home to
local as well as international residents, attractively packaged with all
their needs and amenities.
Of course, from the local point of view, there was always the
question of why one needs to develop a fresh block of land by claiming
from the ocean, when there is so much available land, especially in the
suburbs of the city.
One of the strongest counter arguments put forward was that there is
a premium attached to living on the waterfront especially when it is
next to the business district. The best examples of this are in
Philippines and Dubai where land had been reclaimed from the sea, even
though there was land elsewhere in the country.
Another factor is that for a long time now Sri Lanka has depended on
exporting labour to the Middle East who in fact fall amongst the top
earners in the country. With certain parts of Saudi Arabia becoming
unsafe for our domestic labour market it is important to take a closer
look at our service sector and the obvious direction to take as the
Prime Minister and his team appear to think is the financial sector –
and thus the metamorphosis of the Port City to a Financial City.
Therefore, the entire vision for the Port City is to be a magnet for
attracting financial services, insurance companies, various banking
institutions and along with that, people who are involved in these
industries who can live and work in the Financial City.
However, going beyond the financial aspect of this new city, the Port
City plans are drawn to be inclusive to attract a new brand of residents
who will look at Colombo as a very livable city; and this, experts say
would include the diaspora. The very wealthy is not what is being looked
at here but the middle to upper middle income groups in western
countries who should also have sufficient resources to own an apartment
in the port city.
Coal tender
The controversial coal tender which was much hyped in the media in
the last few months took a sharp turn this past week when the Minister
of Power and Renewable Energy presented in parliament, the findings of a
committee headed by Prof. K.K.Y.W. Perera, a veteran in the field of
electronic engineering and former Professor of Engineering/former Dean
of the Faculty of Engineering and Architecture at the University of
Moratuwa.
He has also held the positions Chairman, Sri Lankan branch of the
Institution of Electrical Engineers UK, General President of the Sri
Lanka Association of Advancement of Science and President of the
Institute of Engineers.
He has served tenures as Chairman of the Ceylon Electricity Board and
Chairman of Sri Lanka Telecom and was a former Secretary of the Ministry
of Power and Energy, a position he held for around 10 years. Other
members of the Committee are Professor Lakshman R. Watawala and
Professor Janaka B. Ekanayake.
The Terms of Reference (TOR) for this committee were to investigate
and report whether, due to the decision on the purchase of coal, there
was a loss or damage to the Government; as well as the economic dynamics
of long term and spot tenders.
The committee members’ impeccable credentials, looks like an all-out
attempt by the Ministry to take the moral high ground on this issue.
It is hard to imagine that buying coal could be such a complicated
process. But now, as we come closer to the season when stocking up on
this chunky fuel at the Norochcholai power plant becomes a necessity,
this matter needs to be resolved sooner rather than later. Due to
monsoon whether coal shipments can only be unloaded between September
and April as discharging from vessel to barge is done on open sea.
The expert team were appointed to find out if there was any hanky
panky going on in relation to the last long-term contract the government
signed for the supply of coal - more specifically whether that contract
had through its process of purchase caused a loss to the country. The
committee came up with a simple answer to this dilemma, clearly stating
that there was a net saving of US $ 287,029.73 to the country.
Interestingly enough, the good professor and his team went even
further to discuss the properties of coal, the calorific value, moisture
content, ash content, volatile matter as well as the size of coal which
they said had a bearing on the operation of the Lakvijaya Power plant.
However, unlike the other parameters which have a significant
influence on output and efficiency, the size of coal plays only a minor
role in plant efficiency. What they said became significant because the
contentious point was the size of the coal particle supplied by Swiss
Singapore, who currently holds the long term contract which has been
stalled due to a dispute.
The report also pointed out the environmental impact that powdery
coal would have and the committee suggested that a study be undertaken
to modify specifications / penalties to overcome these adverse
implications for future supplies of coal.
Be that as it may, coal power experts point out that a solution for
this coal dust dispersement to be controlled is to have this material
stored in the open to be continuously wetted by sprinklers. This is a
standard international practice.
As per the terms of reference, the committee also concluded that the
Ministry had taken the initiative to introduce Spot Tenders for the
procurement of coal.
This has resulted in a saving of US$ 7,596,676.03 for coal purchases
compared to purchases through long term tenders. A mix of procurement
through long term as well as spot tenders had been implemented without
completely relying on spot tenders.
A balance between long term and spot procurement should be maintained
in view of changes in market conditions.
The committee has also concluded that it is important to introduce
technical specification clauses in future, to penalize oversized and
undersized coal after carrying out a detailed study on their impact to
the environment as well as increased cost of crushing larger particles.
VAT predicament
According to the committee Sri Lanka has gained financially, even if
only the long term contract was considered and the penalty for size
specified in the bidding document was applied in the majority of
shipments.
The committee has also suggested that a composite index be
considered, since the payment price for coal is based on the index at
the time of shipment, and because the shipments may come from different
countries such as Indonesia, South Africa, Australia and Russia etc.
The expert committee’s conclusions also state that the combination of
long term tenders and spot tenders, are a definitive advantage in terms
of the total price paid.
It seems like almost six years after coal fired power generation
began in Sri Lanka, the Government has finally come to understand and
implement a fool proof method of purchasing coal which would save
millions of dollars for the country.
Whilst two long standing problems like the purchase of coal and the
Port City have come almost to an end, the coalition government faces yet
another challenge as the VAT bill has gone into limbo.
This bill which was in fact an amendment to the previous law, would
have hiked up the value-added taxes; creating further hardship for the
consumer.
The new VAT bill would have seen an increase from 11% to 15% bringing
small, medium and wholesale traders as well as private healthcare
services under the net. While the exchequer might need all the money it
can get, the decision to increase VAT was not seen as a popular move.
The process of how the bill was presented however, was challenged in
parliament and the Supreme Court had nullified the entire process,
saying that due constitutional procedure and standing orders had not
been followed.
The Government’s defense was that this procedure had been used in the
past in previous parliaments; but the Prime Minister backed down, saying
that he wouldn’t hold this against the Chief Justice. His point however,
was that the proposals were made according to a previous ruling by
former speaker Anura Bandaranaike, who said that the parliament was
supreme.
Be that as it may, for the Government it is a case of going back to
the drawing board and drawing up fresh legislation in conformity with
the Supreme Court ruling.
To China
As the week ended the Prime Minister flew to China accompanied by his
wife Maithree Wickremasinghe and a delegation of Ministers which
included Anura Priyadarshana Yapa and Patali Champika Ranawaka.
According to reports the delegation would be visiting several economic
hubs in China.
The visit seems timely as China now seems like the only answer to our
medium and long term plans. Although India for a while, appeared to be
our great ally and partner, It is now clear that Sri Lanka is
considering China as a partner with great investment potential.
This is the time our economy needs people who can deliver. The
Chinese have shown that they are flexible enough to work with any
government.
The massive infrastructure projects from roads to public utilities
are pushing the economy forward. Yes all this comes at a price and it
looks like that is the new mission of the Prime Minister and the
Government.
The premier’s visit to China can be construed as a signal to the
world at large and more specifically to our neighbor – if you can cozy
up to China Why Can’t we?
The Prime Minister and his ministerial delegation, on Friday night,
left for Guanzhou, the capital and the largest city of Guandong
province, in southeastern China.
Located on the Pearl River about 120 km (75 mi) north-northwest of
Hong Kong and 145 km (90 mi) north of Macau. It was a major terminus of
the maritime Silk road and still serves as a port and transportation
hub.
Guangzhou is the third largest city in China, after Beijing and
Shanghai, with a population of 13,080,500 and it forms part of one of
the most populous metropolitan agglomerations in the world.
Guangzhou is also identified as a Beta+ global city, speaking volumes
of his sophisticated city planning and economic growth.
The Prime Minister’s visit to China takes places in a context where
Sri Lanka is making grand plans for the western province megapolis
programme.
Before leaving for China, Western region megapolis planning project
Chairman Ajita de Costa said, during the visit, they would closely
observe the manner in which China had planned and developed the Guanzhou
city.
He said it would obviously help Sri Lanka’s plans for the much talked
about Western region megapolis. Another important aspect would be how
Sri Lanka wants to integrate the Colombo Port (Financial) City into the
much larger megapolis plan.
Against this backdrop, the Prime Minister’s five-day visit to China
has drawn a lot of attention from business and financial circles. |
