US sanctions on China firms will not affect investments in Sri Lanka’s reclaimed port city: official
ECONOMYNEXT – Colombo Port City, a sea reclamation, where investors will get land from the government of Sri Lanka are not part of United States sanctions targeted at units of its parent company in China and investments in the project are not affected, an official said.
Thulci Aluwihare, Head of Strategy and Business Development at CHEC Port City Colombo (Pvt) Ltd, a sub-subsidiary of China Communications Construction said the company had no current business relationship with any of the CCCC units targeted by the sanctions.
The parent CCCC itself was not targeted by the US but the CCCC Dredging Group Company Ltd, three of its sub-subsidiaries and another subsidiary of CCCC were in the list.
The land in Sri Lanka was reclaimed by CHEC Port City Colombo (Pvt), a subsidiary of China Harbour Engineering Company, whose parent is CCCC.
The reclaimed land is a Private Public Partnership with the government of Sri Lanka where CHEC Port City can recover its investment of 1.4 billion US dollars by leasing buildable land allotted to it, which has been vested with the state.
“I can confidently say there will be no direct or indirect impact simply because this is a PPP,” Aluwihare said.
“Any investor who wants to invest here is getting a lease from the government of Sri Lanka.”
“Now the stage we are at is where we have completed all reclamation, internal infrastructure work is ongoing. We are looking for investors.”
In August 2019, the reclaimed land was vested in the Urban Development Authority of Sri Lanka and the area was declared a part of the Colombo business district by gazette notice.
Out 269 hectares blocks totaling 116 hectares was allocated to CHEC Port City.
“As an investor you will get a lease from the government,” Aluwihare said. “It is just that the plots that have been allocated to the projects company in return for the investments made.
“For giving up the leasehold right, the project company gets a consideration.”
CHEC itself has said it will build the first tower blocks to kick start the project. The government has already given it tax concessions.
A formal Special Economic Zone law is due later in the year.
The US imposed sanctions on five CCCC subsidiaries in August 2020 requiring US firms to have export licenses when dealing with them.
The firms are China Communications Construction Company Dredging Group Co., Ltd. , China Communications Construction Company Tianjin Waterway Bureau, China Communications Construction Company Shanghai Waterway Bureau, China Communications Construction Company Guangzhou Waterway Bureau and China Communications Construction Company Second Navigation Engineering Bureau.
The sanctions were imposed because CCCC had built artificial military islands in South China Sea in disputed territory. (Colombo/Sept14/2020)