Port City: Chinese investor, Govt to sign concession pact

by Ranil Wijayapala

The Chinese investor and the Government are expected to sign the concession agreement which stipulates the commercial aspect of the project and the manner of sharing the benefits after settling most of the issues relating to the US $1.4 billion Colombo Port City project, Secretary to the Ministry of Megapolis and Western Region Nihal Rupasinghe told the Sunday Observer.

Rupasinghe said the representatives of the Chinese company will be here in another two to three weeks to reach a final decision on this agreement. They will sign the concession agreement, ending the months-long negotiations on the Port City project.

He said the Government and the Chinese investor are now in agreement to form a joint venture to share the reclaimed land and run the future business.

Discussions have already been initiated between the Government and the Chinese investor in this regard based on Prime Minister Ranil Wickremesinghe's idea to settle the issues relating to Colombo Port City project, he said.

The Chinese investor is almost in agreement with this idea, he said.

"The formation of such a joint venture will pave the way to settle the differences between the Chinese investor and the Government on these issues", he said.

He, however, said the lands given to them will be on a 99-year lease but not on a free hold as in the previous agreement. "There is no argument on that issue at present", he said.

He said the Megapolis and Western Region Development Ministry is now holding discussions with the relevant agencies to provide electricity, water, solid waste disposal systems and access roads to the Port City which are the government's obligations for this project.

"We have accelerated construction work on the Port access road from Peliyagoda as it should be ready in three years when the land reclamation is completed by the contractor", he said.

The Megapolis and Western Region Ministry as the client of the project on behalf of the Government of Sri Lanka, also believes that the issue relating to the paying of US $125 million dollars as compensation for the contractor for stopping the project, can be amicably settled in Sri Lanka's favour.

"We put forward the argument that the contractor is also responsible for stopping work because he himself is the contractor and investor. They should know that approval obtained for the project was incomplete for which they should share the responsibility ", Rupasinghe said.