My Land, Your Province
In the era of globalisation, a common practice by economically weaker nations has been creating SEZs (Special Economic Zones), to attract foreign investments into these zones which usually provide lower (or no) tax and lower operating cost. This in turn helps the economy around them grow in tandem. Numerous countries (like Ireland, India, Singapore and many more) have followed this model but for Sri Lanka it appears to be at an extreme end, since it had lower bargaining power.
Since it is a contentious issue, amid a global pandemic, in this article we will try to only explore the facts around the development and would let the reader infer from his/her judgement.
What is it all about?
In the capital port-city of Colombo, a part of the sea have been reclaimed and it is been developed by a Chinese entity and financed via FDI from China Harbor Engineering Corporation, a subsidy of the World Bank-debarred China Communications Construction, a Chinese state-owned enterprise.
The land reclamation work had been completed as of January 2018 and the cost was slated to be US$ 15 billion. The project is part of China’s Belt and Road initiative. The port-city is to be constructed between the southern edge of the new Colombo South Port and the Fort Lighthouse. The total area of sea to be reclaimed is 269 ha (660 acres). 125 ha (310 acres) of the land was given to government and 88 ha (220 acres) while owned by the government was planned to be leased for 99 years to the Chinese company. 20 ha (49 acres) was planned to be given freehold to the Chinese company.
These reclaimed lands are not a part of the Colombo District. Hence, it is not considered as a 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.
Attempt to demystify the Bill:
Please find here, the COLOMBO PORT CITY ECONOMIC COMMISSION Bill.
To start with, the Bill provides for the setting up of a Colombo Port City (CPC) Commission of five or seven members, as a one-stop decision-maker on all matters SEZ.
The powers of the CPC Commission include authorizing individual applications to do (or NOT do) business in the Port City, tax-breaks, customs, VAT, and other export-import concessions for investors. Even exceptions from casino and gaming laws, are also provided in the Bill. Never before any domestic investor (leave any foreign) been given such autonomy to operate in the country.
Only private auditors can oversee the SEZ accounts, and not the auditor-general, who is a constitutional authority. The CPC is also out-of-bounds for Parliament and parliamentary panels.
The Bill empowers the President of Sri Lanka, unilaterally, to nominate/replace five of seven members to the Commission, with no involvement from Parliament allowed.
Given the depth and width of the provisions, it is unclear if Sri Lankan government will use it as a model code for new SEZs to extend similar facilities in the future to China or to other nations.
Further Readings:
To read more about the overall pearl of events that China have been planning over the past many years The New York Times article may be refered.
