The Colombo Port City project is facing renewed scrutiny over its ability to deliver adequate economic returns after the Parliamentary Committee on Public Finance (COPF) was informed that the Government had spent Rs. 9.7 billion establishing the ambitious development, prompting questions about investment inflows, business activity and the recovery of public funds.
At a COPF meeting on October 8, Chairperson Dr. Harsha de Silva stressed that taxpayers had borne a substantial cost in developing the Port City and that the State must demonstrate how this investment would ultimately benefit the national economy.
The central issue is no longer simply whether Colombo Port City can attract international investors, but whether the project can translate its promised potential into measurable foreign exchange earnings, employment, government revenue and broader economic growth.
The Colombo Port City Economic Commission (CPCEC) confirmed the Rs. 9.7 billion expenditure. Its Chairperson, President’s Counsel Harsha Amarasekera, told the committee that the Government expected to recover its expenditure when the first State-owned plot of land was sold.
However, the assurance raised a larger question: would the sale of a single State-owned plot be sufficient to recover the public investment, and how soon could the country expect a meaningful financial return?
The committee sought detailed information on investments attracted by the Port City, the salaries of Commission employees, the status of businesses approved to operate there and the Government expenditure incurred in establishing the project.
Opposition MP Shanakiyan Rasamanickam questioned whether public funds were being used to pay the salaries of senior Commission officials and requested details of the Director of Legal Affairs’ remuneration. He also challenged the distinction between the roles of the CPCEC and the Board of Investment, asking how much foreign direct investment (FDI) each institution had attracted and how much of the promised investment had actually entered Sri Lanka in rupees or US dollars.
These questions strike at the heart of the Port City’s economic performance. Announced investment commitments cannot automatically be treated as actual capital inflows. Proposed projects must progress to construction, operational businesses and verifiable financial transactions before their contribution to the economy can be properly assessed.
The Commission identified three major gazetted projects: Marina Hotels Holdings, with a proposed investment of US$114 million; Homelands Port City, with US$152 million; and Primewell Port City, with US$131 million. Their combined proposed investment amounts to US$397 million.
The CPCEC disclosed that Rs. 398 million had been received from the three companies through payments calculated at one per cent of relevant lease and construction amounts. These contributions were credited to the Commission Fund, which supports its operations as a self-sustaining entity.
While this represents a tangible financial receipt, it is not evidence that the Government has recovered its entire Rs. 9.7 billion expenditure. Nor does it establish how much foreign currency has entered the country through the three projects.
The new Government’s opportunity lies in making the Port City more transparent, commercially productive and accountable to the public. A credible assessment requires published figures on realised investment, construction progress, operating businesses, employment, tax receipts and foreign exchange earnings.
The October meeting therefore marked an important accountability test. The Port City may become a valuable financial, commercial and tourism hub, but its success must ultimately be measured by the returns it delivers to Sri Lanka, not merely by the scale of its proposed investments.
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