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13 January, 2016 08:59 AM Source: Financial Times - Sri Lanka
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The controversial Port City project will kick off within the next two months, a minister confirmed yesterday, after the Government completes re-evaluation of the contract and other related investor concerns.

State Minister of International Trade Sujeewa Senasinghe told reporters the Port City would be part of the government’s fresh look at investments to promote foreign direct investment into Sri Lanka. “We have cleaned up the project. There are no commissions and issues with the project. It has also been downsized and the Chinese government has indicated it is amenable to the revamped agreement and understandings presented by us,” he said.

Pointing out the $1.5 billion project will bring significant revenue to the country the minister admitted it would boost the country’s profile. He also indicated fresh proposals made by Chinese companies were being considered by the Government. “As the Chinese economy slows down there companies are keen to invest in growing markets like Sri Lanka. They feel there will be an investment advantage and we are considering several proposals.

One Chinese company recently sent a proposal for a 6000 acre manufacturing zone, which we are not too enthusiastic about because we do not have some a large extent of land available,” he added.

Responding to questions on the environmental sustainability and land ownership issues of the Port City project, Senasinghe acknowledged such issues still needed to be ironed out. The Chinese project was billed by the previous government to attract an estimated $15 billion in investment once it was fully completed.

The minister also alleged 50 acres of the land was earmarked to be handed over to a prominent family of former President Mahinda Rajapaksa’s government.  He also insisted the government would continue the search to refinance high interest loans borrowed by the previous regime. 

The International Trade Ministry will also set up fresh bodies including an Agency for Foreign Development to speed up approval for investor proposals. The first year of the new government and brought in a slew of proposals, Senasinghe insisted, reeling off ideas including setting up an investment zone for Sri Lanka companies in Thailand, a vehicle assembly plant from Chrysler, and using local minerals to kick start a mobile chip manufacturing venture.  He also noted local power generation companies have signed up to start hydro power plants in Pakistan during the recent visit of Prime Minister Nawaz Shariff and plans are underway to establish a new economic zone in Hambantota.
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