COLOMBO: The Cabinet of Ministers yesterday agreed on a number of changes to the Port City Project Agreement, that was signed in September 2014.
A summary of the changes is given below,
According to the agreement signed by the previous government in September 2014, a land of 20 hectares will be granted to the C.H.E.C. Port City (Pvt.) Ltd. on freehold base, with the rest of the land granted on 99-year lease basis.
According to the consultations of the new government, no land will be granted on freehold basis – all the lands will be on 99-year lease basis. If the government does not require these 20 hectares, the company may obtain the land for another 99 years.
According to the original agreement, the Ports Authority Act is to be amended to enable the Ports Authority to obtain 62 hectares from the project company for its use and development activities. According to Article 6 of the Act, this is limited to the objectives of the Ports Authority. Though the previous government has declared that Sri Lankan lands could be used for development of immovable properties, no such authority is granted under the Article No. 6.
Under the new agreement, the Sri Lanka Ports Authority will not be assigned immovable properties development and its responsibilities will be limited to activities allowed by the current Sri Lanka Ports Authority Act. Therefore, it has been decided that the most suitable institution to assign reclaimed lands is the Urban Development Authority.
Under the new agreement, the responsibility of performing government responsibilities, including amendment of the Sri Lanka Ports Authority Act, is vested with the Ministry of Ports and Shipping.
Instead of the agreement signed by the previous government on September 16, 2014 a new trilateral agreement will be signed among the Ministry of Megapolis and Western Development (on behalf of the government), the UDA and the project company.
The status of lands to be filled is unclear under the original concessionary agreement signed by the previous government.
Those lands are not a part of the Colombo district and are hence not considered land belonging to the Sri Lankan territory, according to the Article 5 of the Constitution. Under the new law, the land will be brought into the Administrative District of Colombo, and it will be assigned to the proposed Financial City Corporation out of the Colombo Municipal Council.
According to the original agreement a key tax plan will be implemented by the Sri Lanka Ports Authority, related to the leasing of lands to the project company.
Under the new agreement, filled lands will be gazetted by the President under the Lands Ordinance and thereafter be allocated to the UDA. The UDA will declare them as a development area under the Urban Development Authority Act. This will happen before land is leased on 99-year basis to the Project Company.
Under the original agreement, responsibility for funding the income support programme for fishermen was a responsibility of the Sri Lanka Ports Authority. No such programme was implemented by the previous administration of the SLPA.
Under the new agreement, the project company will allocate Rs. 500 million for the fishermen’s income support programme, to the Ministry of Megapolis and Western Development, to implement the programme in consultation with the Ministry of Fisheries and Aquatic Resources Development.
The previous administration had this as a Land Reclamation Project to utilise this initially for real estate, sports, education and cultural development including night racing tracks etc. Therefore, the bulk of the land was not available for real estate development by the government.
Now it has been agreed with the Chinese Government that this land is being used to build a Financial City to fill the vacuum between Singapore and Dubai. This will enable offshore operations. For this purpose, the government will propose new laws for governing offshore activities like in Dubai. The Financial City will be a major income earner and an employment provider for Sri Lanka.
