The Indian government doesn’t appear keen to invest in the China backed $14-billion Port City Colombo (PCC) project and further it has been reported that the government has conveyed to Indian private stakeholders that “any involvement” will be viewed adversely.
Coming up on 269 hectares of land reclaimed from the Indian Ocean, the PCC is being developed as an extension of Colombo’s Central Business District. Unveiled during a visit by Chinese President Xi Jinping in 2014, it’s the single largest foreign direct investment in Sri Lanka. Beijing has already invested $1.4 billion to reclaim land for the project.
According to the official website of CHEC Port City Colombo Private Limited, the project is envisioned as South Asia’s premier residential, retail, and business destination. It will comprise five different precincts — “the financial district, central park living, island living, the marina, and the international island”.
Senior government officials told ThePrint that the project came up for discussion in a high-level inter-ministerial meeting chaired by Deputy National Security Advisor Vikram Misri on 1 July.
The meeting — convened to look into opportunities for enhancing economic linkages with Colombo — took a strong view that if private stakeholders decide to get involved in the PCC in any way, they would “essentially be on their own,” according to government officials familiar with the decision.
India is concerned that with its “extra-territorial and lax jurisdiction”, the PCC raises apprehensions of being a “hub for money laundering and extra-legal activities” and “Indian companies investing there could face deeper scrutiny of relevant agencies
Besides, it was also felt that the PCC, which is envisioned as a financial centre, would “rival India’s own plans, like GIFT City in Gujarat”.
Once completed, the Gujarat International Finance Tec (GIFT) City will be India’s first business district housing an international finance service centre and special economic zone for domestic and international financial services. In the 1 July meeting, India also put together a comprehensive plan to step up its assistance to Sri Lanka, boost critical infrastructure and to use the opportunity to strengthen traditional bonds between the two neighbours. Some of the steps to be taken include the development of the Trincomalee Port, power projects, increasing frequency of flights, and the resumption of ferry services.
