COLOMBO PORT CITY DEVELOPMENT PROJECT

COLOMBO PORT CITY DEVELOPMENT PROJECT

Subject: International Relations

Context: Last month, Sri Lanka passed the controversial Colombo Port City Economic Commission Bill, which governs the China-backed Colombo Port City project worth $1.4 billion, amid wide opposition to the creation of a “Chinese enclave” in the island nation.

Concept:

• The project was launched in September 2014 by Chinese President Xi Jinping during a visit to the island nation under the Mahinda Rajapaksa administration’s second term.
• It is named the “Colombo Port City”.
• It is the largest single foreign investment by China in Sri Lanka among the other massive infrastructure projects.
• The Port City will attract billions of dollars for trade, banking and offshore services similar to what is available in Dubai and Singapore.
• The Port City will be administered by a commission with various powers to fast track investment approvals.
• All transactions within the Port City will be denominated in foreign currency and all salaries earned by any worker will be tax-exempt.