A Chinese-funded tax-free enclave billed as Sri Lanka’s answer to Dubai and Singapore cleared the final legal hurdle Tuesday as the Supreme Court in Colombo ruled it could go ahead with only minor tweaks.
The largest single foreign investment in Sri Lanka is one of several massive Asian infrastructure projects funded by China as Beijing increases its regional footprint.
Sri Lanka’s top court rejected 19 petitions challenging the “Colombo Port City Economic Commission” bill and approved the $1.4-billion project subject to minor amendments which the government immediately said it accepted.
Project officials have said they hope the brand new “Port City,” an area of reclaimed land, will attract billions of dollars for trade, banking and offshore services similar to what is available in Dubai and Singapore, two of its potential competitors.
Named the “Colombo Port City” because of its proximity to Colombo’s main harbour, the sea reclamation — carried out with considerable Chinese labour — completed in 2019 has doubled the size of Colombo’s financial district by adding 269 hectares (665 acres).
Under the proposed legislation expected to be passed by Sri Lanka’s parliament on Thursday, the Port City will be administered by a commission with unprecedented 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.
Western countries, as well as regional power India, have long expressed concern over growing Chinese influence in strategically placed Sri Lanka.
US ambassador Alaina Teplitz told reporters last month that an unintended consequence of the Port City could be “a haven for money launderers and other sorts of nefarious actors.”
However, the Supreme Court noted that “laws which seek to prevent money laundering and terrorist financing… apply within the area of authority of the Colombo Port City.”
Global Trade News
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Sri Lanka gets $500m South Korean loan after Chinese bailout
Colombo (AFP) May 10, 2021
Sri Lanka said Monday it had secured a $500 million loan from South Korea, a month after a similar loan from China as the island faced a foreign exchange shortage amid a debt crisis.
The government said South Korea agreed to provide the loan at a concessional interest rate of 0.15 to 0.20 percent, repayable over 40 years with a 10-year grace period.
“The framework arrangement was signed today,” the finance ministry said in a statement.
Last month Colombo raised another $500 million loan from … read more