Most issues amicably settled:

PORT CITY gathers steam

by Ranil Wijayapala

The controversial Colombo Port City project which sailed through stormy waters, has finally reached a peaceful solution, with issues being amicably resolved following many months of discussions between the Sri Lankan government and the Chinese investor.

Certain issues, however, regarding the project were still unclear to the public. The Sunday Observer met veteran engineer Nihal Rupasinghe, now the Secretary to the Ministry of Megapolis and Western Region Development, the new client of the Port City project regarding the present status of the project.

Q:Now the Colombo Port City project is under the purview of the Ministry of Megapolis and Western Region and not under the Ports Authority. How did this happen ?

A: After this government took office, the Colombo Port City project was halted on the basis that proper approval had not been obtained.

The Attorney General had said the Ports Authority did not have the authority to sign agreements as it was not authorised to do anything outside the port and the agreement that was signed become illegal.

The Urban Development Authority(UDA) was then contacted but it too didn't have any authority to claim new land. Then the government decided that the Ministry of Megapolis, as being the client as the UDA comes under our purview.

The official client is now the Ministry of Megapolis. When land is reclaimed, the UDA will take over the project under its purview.

Q:The government suspended the project, saying that it had not followed proper procedure when obtaining approval for the project. Have all the legal barriers been cleared regarding the project?

A: According to the law, permission to fill the sea can only be given by the President. We are now getting approval to make it within the legal framework .

Q:Have all the environmental issues been addressed now?

A: Some of them were not properly addressed under the previous client - the Ports Authority. Issues such as sand mining and boulder transportation were not addressed in the former Environmental Impact Assessment(EIA) report. We did a thorough study regarding these issues.

We handed over the report to the Coast Conservation and Coastal Resource Management Department(CCD), the approving agency for the project.

The CCD after evaluating the report and calling for public views, gave the required permission setting out 72 conditions. This is not abnormal.

This procedures should be adopted during construction. The Beiral Lake outfall also comes under the Port City and these issue too have to be addressed. Engineering studies regarding the issue of the Beira Lake outfall have also to be done.

Q:What is the next step ?

A: After obtaining the required environmental clearance from the CCD,the Cabinet has appointed me as the Secretary to the Ministry of Megapolis and Western Region and as the new client to authorise the recommencement of the project.

The contract was earlier signed by the Ports Authority for six months before it could be made valid. I issued a letter that they could commence the project under these conditions.

Q:Have they started now?

A: The Chinese contractors have started the project. They have not commenced in a big way. The 72 conditions laid out have to be followed. We have to issue the licences.

Quarries for metals and boulders and sites for sand mining have been identified. For deep sand mining, testing is being done in the deep seas.

Q:But there were negotiations between the government and the Chinese investor regarding the sharing of land and other related matters. The public do not know anything about this?

A: The Government signed two agreements with the Chinese investor. One is the development agreement and the other is the concession agreement.

This is a commercial agreement and a claim of a 125 million US dollar claim has been made for halting the project.

Compensation is claimed when the work is stopped. This is the extra cost of mobilising machines, keeping the staff and loss of time. But we said the contractor is also responsible for stopping work because they are the contractors as well as the investor. They should be aware that the approval was incomplete and should share the responsibility.

Q:Do you think that the Government has to pay compensation?

A: Prime Minister Ranil Wickremesinghe also said the request for compensation could be entertained. An amicable solution could be reached soon without payment to the Chinese company.

Their lawyers will come to Sri Lanka in another two to three weeks and we can achieve a favourable response.

Q:There is a perception that the 500 million Yuan grant pledged by China to Sri Lanka is to cover that cost of compensation. Is there any justification?

A: No. There is nothing like that. I think we can settle the issue without making any compensation to the Chinese company.

Q:Is there a final agreement over the issue of sharing the extent of reclaimed land between the government and the investor?

A: We have done the EIA for the extended land of 262 hectares. On this issue also I think we can settle it amicably. Differences are less now with both parties.

They want the agreement as it is. There was a proposal to reduce the land extent.

But they did not like that. We are discussing the issue and can amicably settle that as well.

Land given to them will be on 99-year lease and not on a free hold. Earlier they claimed the land for commercial reasons.