The Sunday Leader

Controversy Surrounds Colombo Port City

By Camelia Nathaniel - Pictures by Lalith Perera

The current government under president Maithripala Sirisena has come under heavy criticism with the cabinet spokesman Rajitha Senaratne saying at a press briefing that the cabinet had decided to go ahead with the Colombo Port City project. However, the prime minister later in parliament stated that this was not the decision of his government and said that the project would be reviewed before a final decision is reached.

Leader of the House and Plantations Industries Minister Lakshman Kiriella said on Tuesday (10) that a statement giving the government’s stand on the Colombo Port City project will be made by him in Parliament on February 18. Minister Kiriella in response to a question raised by Opposition Leader Nimal Siripala de Silva under Standing Order 23 (2) with regard to the government’s stand on the Colombo Port City Project, made this remark.

However JVP Leader Anura Kumara Dissanayake, earlier affirmed that his party would not allow for construction of the Colombo Port City to continue. He charged that the previous government had simply given away 575 acres in front of Galle Face to the Chinese to reclaim and build an island. According to Dissanayake, there are laws governing the reclamation of paddy land or even swamps, but there is no law for land reclamation from the sea, and stressed the importance of introducing such laws.

He further pointed out that an environment impact report was not compiled. In order to reclaim 575 acres, there should be a bed of at least 1,000 acres. Dissanayake also said that according to his sources 120 million cubes of stone were required and pointed out that no one was looking into where the stone is coming from.

Construction of the Colombo Port City project was launched on 17 September 2014 by Former President Mahinda Rajapaksa and the Chinese President Xi Jinping. The approximately 230 hectares of reclaimed Port City would include roads, water, and electricity, communication facilities to set up shopping areas, water sports area, mini golf course, hotels, apartments, recreation areas and marinas. According to the initial plan, there was a move to include a new Formula One track, constructed in the vicinity of the Colombo Harbour.

In addition to environmental concerns however, India had raised concerns over the project saying the project is a security concern because of the large number of India-bound cargo that pass through Colombo port.

Environmentalists have pointed out that there are environmental implications when reclaiming land from the sea and that a comprehensive environmental assessment was not carried out prior to the approval and commencement of this project by the previous regime. However, in spite of the current government making a huge hue and cry about the project while they were in the opposition,  Cabinet Media Spokesperson Minister Dr Rajitha Senaratne recently stated that there was no issue with the Environmental Impact Assessment carried out on the project.

Having assumed power on the 21st of January, the government established a committee, with cabinet approval, to review the project. The committee was chaired by Prime Minister Ranil Wickremesinghe, and included Ministers Patali Champika Ranawaka, Rajitha Senaratne and Arjuna Ranatunga.

However, following a visit on the 5th of February by Chinese special envoy and Deputy Foreign Minister, Liu Jiang Chao, the Cabinet Spokesperson adopted a different tack regarding the port city project.

The vice president of the Chinese company in charge of the project Zhang Bao zhong, told reporters in Quan zhou, in southern Fujian province, speaking on the sidelines of a major Chinese government meeting to push a ‘Maritime Silk Road’ initiative aimed at deepening ties with countries in the region, including Sri Lanka, that the project would extend over 276 hectares, including a 5.2 million square metre building area, and give employment to 83,000 locals. He assured that his company would follow strict standards wherever they operated, he said. “We follow our own corporate culture but try to integrate into local society. We focus a lot on environmental protection. For marine projects we have strict standards about maintaining purity of the water body. We have 24-hour sentinel stations. And if there is any influence at all on water quality, we will change our implementation plan,” he was quoted as saying.

However, confusion deepened last week regarding the controversial Colombo Port City Project when the Leader of the House and acting media spokesman Lakshman Kiriella told journalists that work on the project had been stopped. Kiriella, who was sitting in for Minister Rajitha Senaratne stated that there were several major flaws with the project including that it did not conform to the country’s environmental laws. Kiriella further said that the Environmental Impact Assessment (EIA) regarding the project had not been completed. He said as such, the project was currently being reviewed. This was a complete contradiction to what Cabinet Spokesman and Minister of Health Rajitha Senaratne had earlier told the media that the EIAs required had been completed and there was no issue there. In fact, Senaratne had told the media as recently as the 11th of February that there was no issue with the EIA and that work on the port city had not stopped.


Environmental Impact evaluation

The Sunday Leader contacted the head Marine Biological Resource Div of NARA Dr Rekha Maldeniya who was part of a team that carried out a basic study on the impact on marine life, who said that according to their study, there were no major environmental impacts due to the reclaiming of land for the Colombo port city project. She said that the sand extraction area from Kepumgoda to Palangathure area is around 7 miles away from the shore. “It is basically a sand deposit and there is no marine life there. We deployed divers to survey this area and they reported that there were very negligible amounts of marine life,” she said.

However on the contrary, environmental lawyer Jagath Gunawardana said that although a comprehensive study was not carried out, he had studied a prepared environmental report and according to that they had only looked into the aspect of the landfill area. The definition of the environmental assessment as it stands says that it should be a report where they have to look as several aspects. One such area that they have to look into is the renewable and non renewable resources that is required for the project, which this environmental impact assessment has not looked into.

“As it stands the Environmental Impact Assessment has only been done for the filled up area and therefore they have to do another EIA to determine the amount of sand they need to fill the reclaiming area and also from where this sand will be taken. That is a big issue as they have to get the sand from the offshore sand deposits and we are not sure if there is enough sand in these deposits. Further they also have to do a study to determine if by excavating this sand if it will have an impact on marine life which will directly have an impact on the livelihoods of the fisher folk. They will also have to assess the areas which will be affected and the number of fisher folk that will be affected and also for how long and how they plan to compensate these fisher folk. All these aspects should have been assessed prior to them embarking on this project. But now they have not looked at these aspects and as far as I know they have only conducted an initial environmental report which is not a good thing”.

“Further the other non renewable resource is stones, which has to be obtained from inland sources. But they have yet not identified from where they are going to obtain this requirement of gravel or stones. Gravel or stone is usually obtained by breaking up rocks or hillocks and by breaking them from inland areas could have other environmental implications.  Therefore what we find is that this so called EIA assessment they have done for the Colombo Port City project is an incomplete document, which does not address the resources issues adequately. Further the associated resources issues have not even been mentioned. Hence what they have to do is stop this project immediately and carry out a comprehensive environmental impact assessment for the whole issue and come up with an economically feasible, environmentally bearable and socially acceptable solution. If one only looks at the land area that needs to be filled up, they will only get a false picture. That is what this company has been trying to do for the past two weeks. They have no permission whatsoever to get the sand from the sea,” said Gunawardana.

Meanwhile when asked what measures they have taken to assess the feasibility of this project, environmental impact and if local entities were given the opportunity to review any of the studies, the Managing Director of CHEC Port City Colombo (Pvt) Ltd. said that prior to extending interest in being the project proponent for the Colombo Port City, the SLPA commissioned the University of Moratuwa to undertake an Initial Technical Feasibility Study and Environmental Impact Assessment (EIA) Study for the Port City Development Project in 2010. The EIA was completed in April, 2011, and submitted to the Coast Conservation & Coast Resources Management Department by the SLPA for approval.

In a statement he said that in September, 2011, the Coast Conservation & Coast Resources Management Department published the EIA for public comment for a period of one month. Acting on behalf of the SLPA, the University of Moratuwa clarified all public inquiries collected by the Coast Conservation & Coast Resources Management Department. Thereafter, the project was expanded for hydraulic considerations, whilst maintaining geometric similarity and within the specified physical boundaries. Given the nature of the changes, the Coast Conservation & Coast Resources Management Department requested that the SLPA provide a detailed addendum to the previous EIA. The EIA addendum was submitted by the SLPA to the Coast Conservation & Coast Resources Management Department in September, 2013.

In November, 2013, the Coast Conservation & Coast Resources Management Department issued a ‘No Objection Letter’ to the SLPA, in relation to the EIA. In September, 2014, the SLPA was issued a sand mining license by the Geological Survey and Mines Bureau.

In October, 2014, the Coast Conservation & Coast Resources Management Department issued final approval for the EIA pertaining to the Port City Development Project. Additionally, an Environmental Management Plan (EMP) was submitted by CCCC, as per the requirements of the Environmental Impact Assessment. This EMP was approved by the Coast Conservation & Coast Resources Management Department in December, 2014.

Further when asked how the Port City Project was awarded to CCCC and what was the process followed, Houliang said that the procedure in the procurement of the Port City Development Project has taken a considerable period of time, approximately three-and-a-half years. In April, 2011, CCCC submitted an unsolicited bid to the Sri Lanka Ports Authority (SLPA) for the Port City Development Project. This was reviewed by the Standing Cabinet Appointed Review  Committee (SCARC) in September, 2011. The role of SCARC is to assess unsolicited or standalone development proposals and decide the manner in which such proposals could be proceeded with, and advise the relevant line Ministries or the Government agencies on matters relating to such proposals. SCARC instructed the Sri Lanka Ports Authority (SLPA) to enter into a Memorandum of Understanding with CCCC. Both parties entered into a Memorandum of Understanding in September, 2012.

In October, 2012, CCCC submitted a detailed proposal pertaining to the Port City Development Project to the SLPA. After clarifications with CCCC, the Technical Evaluation Committee (TEC) submitted a TEC evaluation report to SCARC in January, 2013. Thereafter, SCARC submitted a report to the Cabinet recommending that the SLPA and CCCC enter into the Concession Agreement after obtaining the clearance of the Attorney General, and the committee also recommended that it proceed as a Strategic Development Project. In January, 2014, the Cabinet approved key terms of the Concession Agreement and for the Port City in Colombo to proceed as a Strategic Development Project. In September, 2014, the Cabinet gave approval to the Secretary to the Ministry of Highways, Ports and Shipping to enter into an Agreement on behalf of the Government of Sri Lanka with CCCC, under a GoSL Agreement, with a Concession Agreement with the SLPA, as an Annexure. The GoSL Agreement and the Concession Agreement were approved by the Attorney General and subsequently signed by the relevant authorities on 16th September, 2014, he said in his statement.

Explaining the terms and conditions the CCCC forwarded when undertaking this project, he said that the investment by CCCC for the construction of the Colombo Port City Project is USD 1.4 billion. The initial proposal was to build 233 hectares of land and CCCC has requested for 30 hectares of freehold land and 90 hectares of leasehold land for 99 years. In the final agreement, they were granted 20 hectares of freehold land and 88 hectares of leasehold land for 99 years.

Asked what the CCCC was expecting in return for this investment Houliang said that with an investment of USD 1.4 billion, CCCC is looking at Colombo Port City purely from a commercial point of view and is keen to explore commercial returns. This return is expected from the 20 hectares of freehold land and 88 hectares of leasehold land for 99 years granted to CCCC under the project.

Talking about CCCC and China’s interest in the project, he said that CCCC is a state-owned enterprise but run purely as a commercial business. CCCC has no other interest in the project beyond commercial interests. Further, CCCC is committed to supporting the Sri Lankan Government’s vision of making the country a gateway to South Asia. Spanning 233 hectares, the Colombo Port City will be the single largest private-sector development project in Sri Lanka.

He further explained that the project is fully funded by CCCC’s internal financial resources. The Sri Lankan Government will not incur any costs in the reclamation stage or the future development of the project.

Asked how he sees the project benefiting the common man in Sri Lanka Houliang said, “We estimate 83,000 jobs to be created under this project and Sri Lankans will have an excellent opportunity to expand and develop their skills in various sectors. Colombo Port City is expected to attract USD 13 billion worth of Foreign Direct Investment from around the world and will contribute significantly to the economic growth of the country in the next 10 years and beyond. Out of these 83,000 jobs, the project’s aim is to offer 9 out of every 10 employment opportunities to Sri Lankans. Qualified Sri Lankans will be a part of the emerging business environment in Sri Lanka and skilled youth of today will have tremendous employment opportunities within many sectors of the Colombo Port City such as Business, Trade, Education, Retail, Entertainment, Tourism and Hospitality. Considering the wide array of sectors that are expected to operate in the area and the resulting services required for those visiting, living or working in the city, there will be a very large amount of skilled labour required from the country as well.”

Finally when asked what the status of the project at this point was, as the government assesses its feasibility, he said that construction work on the Colombo Port City continues. “We have not received notice from any relevant authority to suspend the project during this reassessment period. China Communications Construction Company Limited (CCCC), as a responsible corporate, is fully committed to fulfill its enterprise responsibilities through due diligence and support authorities by providing all necessary information according to regulations to assess and review the Colombo Port City Development Project.”

There is only very limited information available on the actual effects of land reclamation activities on ecosystems and it is therefore difficult to determine how land reclamation affects the overall quality status of the marine environment due to the Colombo Port City project. The reclaimed land will also reduce coastal fishing grounds, mainly for local fishermen.

With so much controversy and confusion regarding the future of the Colombo Port City project, the country is waiting eagerly for the present government to come up with a firm decision by the 18th as promised.

6 Comments for “Controversy Surrounds Colombo Port City”

  1. gamarala

    Port City will be the most expensive real estate site and also the biggest ‘white elephant’ in sri lanka.
    Our children’s future is at stake.

  2. Farook Hamid

    The Port City will be a another tiny Singapore and rightful owner and administrator will be China. In other word tiny part of China

  3. Bandula

    First focus on completing Galle Hospital before go to MEGA construction


  5. Trevor Jayetileke

    I will comment on this Port City project after the 18th of February 2015.

  6. This project has to be evaluated on the basis of the advantages to the economy and environmental disadvantages, with what tourisn means or is it Casinos, brothels, night clubs and such cheap entertainment done in Thailand, Singapore, The Phillipines where young wome are exploited. The price has to renegotiated as well by qualified cost and works accountants. Then again the criticism in the parlimenbt by the members who now are in the new government side. Sri Lanka has the right to accept or reject any project irrespective of the foreing country and its alliance involved. China cannot force a project to Sri Lanka and the unfettered right of acceptance lies only with Sri Lanka

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