China and Sri Lanka have decided to redefine the controversial Colombo Port City project by making it an international financial outpost in the Indian Ocean, as part of the 20-year framework plan.
An upbeat Sri Lankan Prime Minister Ranil Wickremasinghe said during a media conference on Saturday that from a real estate project, a decision has been taken to develop the Port City into a financial hub in the Indian Ocean. “Sri Lanka has been planning to establish a financial and business hub in the Indian Ocean and we selected the port city to be the location (for this). So from a landfill and real estate (project), it has become a financial hub.”
He pointed out that the Port City would become part of turning Sri Lanka’s Western Province into a megapolis of 8 million people. “(It will be) the bigger city in the Indian Ocean where there will be more opportunity of infrastructure development by Chinese and other companies”.
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Mr. Wickremasinghe stressed that the project will not have any impact on Indian security. “We have discussed it with India and we are willing to discuss it with India further. As you know this is not going to be China-Sri Lanka venture. It is going to open to everyone and already many Indian businessmen have told me that they are willing to come to the port city.”
He added: “It will be a joint venture with a Chinese company and a Sri Lankan company and we want to put 40 per cent out into the stock market and it will give an opportunity to Indian companies to invest in the Sri Lankan venture.”
The Prime Minister highlighted that his government wanted to turn the port of Humbantota into another Shenzhen-- the city that was at the heart of former Chinese leader Deng Xiaoping’s reforms. He rejected the contention that like Gwadar in Pakistan, the Chinese will manage the operations of the port.
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“The second phase of the Hambantota harbour is on. Again Hambantota development is not a Chinese-Sri Lankan development. Anyone can come and develop in the area. As far as the operation of the port and the airport are concerned, the state will become regulators and there will be separate independent operators. We will have a stake in the operation of both the port and the airport. The Sri Lankan navy will have a base in Hambantota shifting from Galle.”
Mr. Wickremasinghe said that the Sri Lankans were talking to Andhra Pradesh Chief Minister, Chandrababu Naidu about greater cooperation between Sri Lankan ports and Visakhapatnam once an economic and technology agreement with India materialised. “What we are doing in Sri Lanka is an Economic and Technology agreement with India, FTA with China, FTA with Singapore and GSP plus with EU.”
Mr. Wickremasinghe said during his visit “a comprehensive economic strategy” between Sri Lanka and China had been defined, which would be relevant for the next two decades.
“I would call this a second rubber-rice pact”, he observed, refereeing to the 1952 agreement between Beijing and Colombo when Sri Lanka traded rubber with China in return for much needed rice.
The Prime Minister pointed out that with China as one of the core partners, his country had devised a regionally inclusive “economic plan,” which would establish Sri Lanka as a “financial, business and logistics hub”. He added that the framework of the plan aligns with China’s Belt and Road initiative, India’s make-in-India policy, and Singapore’s vision of economic engagement with Colombo.
A Joint Statement issued at the end of the visit said that, “ The two sides will use the development of a 21st Century Maritime Silk Road as an opportunity to further advance infrastructure development, the China-Sri Lanka FTA negotiations, promote joint ventures and expand cooperation in the areas of economy, culture, science and technology and people to people contacts.”