Govt. to launch ‘Mega city Action Plan’

Published : 9:44 am  January 3, 2018 | No comments so far |  |  (296) reads | 

of CIFC at FDI of US$.1 billion


IMG_2790_25122017_U07_CMYConstructions of the Colombo International Financial City (CIFC) under the ‘Mega city Action Plan’ (MAP) at a cost of US$ 1 billion (Rs.151 billion) will be launched in the first half of this year, Megapolis and Western Development Minister Patali Champika Ranawaka said.

Minister Ranawaka has obtained the cabinet approval to sign a non-binding MOU between the Ministry of Megapolis and Western Development, China Harbour Engineering Company Ltd and CHEC Port City Colombo (Pvt) Ltd to assist the Project Company in obtaining the required approvals from its ultimate parent company, China Communications Construction Company Ltd, and the China Development Bank.

The US$ 1 billion investment is a new Foreign Direct Investment (FDI) to create the CIFC Building Complex in the Port City, Minister Ranawaka said.

Proposed Investment on the CIFC Building Complex was executed by CHEC Port City Colombo (Pvt) Ltd and China Harbour Engineering Company at Port City, Colombo.

“The construction of the Colombo Port City Development Project (CPC) is progressing satisfactorily according to agreed program. The project is being implemented by the parties according to the Tripartite Agreement (TPA) signed on 12th August 2016 by the Ministry of Megapolis and Western Development (MM and WD) on behalf of the government and Urban Development Authority (UDA) and CHEC Port City Colombo (Pvt) Ltd (Project Company),” Minister Ranawaka stressed.

The CIFC Building Complex is a component of the “hard infrastructure” to support the Government’s initiative to implement policies and legislation relating to setting up a CIFC. The proposed CIFC building complex will be an iconic structure that will position Colombo as a modern and sophisticated financial and business hub. The Complex will integrate lifestyle elements within Colombo Port City to attract new businesses, entrepreneurs and professionals and will include an office tower, residential towers and a retail complex that will be integrated with the Marina and Public parks, he said.

The building complex would be located on 6.8 hectares of land and entail a total Foreign Direct Investment (FDI) of approximately US $ 400 million in phase 1 and further $600 million in phase 2. This is over and above the Project Company’s committed investment of $1.4 billion to create the Colombo Port City landfill and related infrastructure.

Furthermore, the land identified for the development of the CIFC Building Complex would be within the Project Company’s entitlement of the first 20 hectares of marketable land selected as per the Tripartite Agreement.

The seabed reclamation is currently being carried out on the basis of a permit issued to the MM and WD by the President under the State Lands Ordinance. Until the land is fully reclaimed and declared as territory of Sri Lanka under this Ordinance, no party to the Tripartite Agreement could develop or alienate the reclaimed land.
As the above FDI of $400 million is expected to commence late 2018, it is proposed that part of the reclaimed land including the above-mentioned land entitlement of the Project Company would be gazetted under the Lands Ordinance via a separate decision of the Cabinet of Ministers in order to enable the project company to enter into a 99 year lease. While the rest of the reclamation is expected to be completed in 2019, a partial declaration of the land under the Lands Ordinance is permissible under the Tripartite Agreement, subject to required surveys, completion tests and legal process being followed.

Currently, around 50% of the reclamation is completed and investment plans are being made by the Project Company to construct the required internal infrastructure facilities to meet the target of commencing construction of the CIFC building complex by last quarter of 2018.

Untitled-4The Environmental Impact Assessment (EIA) study report, which covers the Provision of Infrastructure Landscaping and Development on the created land was submitted to Coast Conservation & Coastal Resource Management Department for opening for public comments which began on November 1st, 2017. The study report was open for Public Comments. The Public Comments were recieved up to December 18th, 2017. By March 2018 the decision of the ETA 2 will be available. Accordingly the construction of the building complex will begin after obtaining the ETA approval. As part of the technical and feasibility studies for the proposed investment, the Project Company has, in consultation with the MM&WD, carried out an international urban design idea competition to master plan the development area. The competition was organized under the supervision and guidelines of the International Union of Architects. The winning design, selected by a panel of international and Sri Lankan judges, was by Skidmore Owings & Merrill (SOM) of USA. The CIFC building complex design also has been awarded to SOM.

In addition, the Project Company has commenced a financial viability study and engaged the China Development Bank to secure Project financing in order to secure the debt component of this FDI without any financial burden to GOSL or local banking system.

The Project Company has informed the MM and WD that in order to obtain the necessary internal approvals to secure the necessary equity contribution for the CIFC Building Complex from China Communications Construction Company Ltd, the ultimate parent of the Project Company, and formal commitments by the funding agencies such as the China Development Bank, there should be a non binding Memorandum of Understanding (MOU) between the GOSL, CHEC and the Project Company. This MOU can be subject to the identified land being subsequently declared under the Lands Ordinance of Sri Lanka and vested in the UDA as stipulated in the Tripartite Agreement. The 99 year lease period of the land will begin with commencement of construction work at site.