Critical Analyses of Colombo Port City Project

By Dulip Jayawardane  (2015-02-16)

The Colombo Port City project was initiated by the previous regime and was finalized with the signing of different agreements in 2014 with the Sri Lanka Ports Authority (SLPA), Board of Investment (BoI) and Urban Development Authority (UDA) with China. These local agencies were assigned the responsibility of administration of this mega project. The main objective of the project is to create not only a major maritime hub but also a harbor city for attracting major overseas private investors with tax holidays, etc. 

It is believed that plans for a Colombo Port City were first proposed by the UNP government in 2004 by acquiring land in the Colombo city area and this plan would have caused problems in relocating the people in alternative land within the city. To overcome these problems, the last government decided to construct the port city by reclaiming the sea. 

However, under the Colombo city beautification project carried out by the UDA finally resulted in a large number of people displaced and this land was allegedly sold to foreign companies at exorbitant prices for construction of luxury apartments and high-rise buildings and hotels, etc., calling for unsolicited proposals with the BoI tax holidays, etc.

The project envisages the reclaiming the sea adjoining the Galle Face Green by constructing two breakwaters and the reclaimed land will be developed. According to media reports, this land will be developed by constructing a Formula 1 race track, yacht marina, a mini golf course plus hotels, skyscrapers, apartment residencies and high-end shopping malls to cater for the ultra-rich from developed countries as well the oil-rich countries in the Middle East and of course China. 

The total land area thus reclaimed from the sea will be about 500 acres but again media reports are not certain of this figure, which varies from 450 to 575 acres.The details of this project are not in the public domain and the people of this country are unable to assess the environmental, social and economic impact, which according to the SLPA, is the largest single private sector development project in the history of Sri Lanka. 

The unsolicited project proposal was submitted by China Harbour Engineering Company (CHEC), a partner of China Communication Corporation Co. Ltd (CCCC), under the Fortune 500 companies and is the main contractor. This consortium was granted the permission by the Standard Cabinet Review Committee (SCARC) through the Department of Public Finance (Treasury) to accept this unsolicited proposal for further action. 

On the approval of the SCARC, the SLPA entered into a Memorandum of Understanding (MoU) with CCCC to obtain the detailed proposal, which was evaluated by the Technical Evaluation Committee of the SPLA, one of the project proponents, thus possibly creating a conflict of interest. It is also stated that the ‘first approval’ was granted subject to ‘agreement’ by the Attorney General (AG) but the writer is unable to ascertain whether this agreement was studied by the AG with his comments on the legal aspects.

The first stage of the project is estimated to cost US $ 1.5 billion and will include reclamation, construction of the two breakwaters of 3.25 kilometres in length, connected road networks and supply of services. It is not clear how such services will be procured, i.e., whether it will be by open tender, etc. 

The developers, CHEC and CCCC, will provide 450 acres of land to the SLPA, which according media reports, the SLPA will earn an investment of US $ 20 billion by leasing this land on a 99- year lease. Former Chairman of the SLPA goes on record saying, “We will receive a large financial benefit by granting these land extents on long-term lease that will enable the SLPA to receive a large financial benefit that will enable the SLPA in return, to pay back all loans, “implying loans obtained for the construction of Hambantota and the Oluvil harbours, whose economic viability is now under scrutiny.” This statement is like ‘counting the chicks before the eggs hatch’. 

Social and economic impact of the project From the scratchy details available to the public on this project, it is believed that there will be an alien community living close to the shores of our country with high-end living and will consist of a cosmopolitan group of foreigners and locals as well as expatriates who will be isolated from the majority of the common man on the mainland still struggling to earn a proper living. Social reformers can argue as to what benefits will accrue to Sri Lanka in the long-term apart from the short-term benefits such as employment to local construction workers, companies as well as employment opportunities in the hotels, shopping malls.

Formula 1 motor race as well as other recreational facilities will attract high-end people again for short periods and will not be sustainable. It is best to estimate the fraction of the population of the country that will be permanently employed in the port city with the total population and realize that such ventures will increase the gap between the rich and the poor significantly.

It is best for the government to focus on more viable projects such as the manufacturing industry, services, etc., that will generate employment and earn foreign exchange with import substitution. Further, if the government is keen to continue its friendly relations with China traced to six decades, it should pursue more people-friendly projects involving the Chinese private sector. 

It is impossible to make a realistic assessment on the economic impact of the Port City project as a detailed financial evaluation with reliable capital and recurrent expenditures for generating an income of US $ 20 billion is completely from the ‘blues’.
Environmental impact assessment

It is imperative that a detailed Environment Impact Assessment (EIA) should be conducted as a vital prerequisite in evaluating such a mega project. With this writer’s experience on integrated coastal zone management and conflicting land use in coastal zones for nearly 15 years at UN ESCAP, coastal zones are identified as the interface between land and the ocean and in constant state of change.

The natural rate of change and the mode varies with the waves and currents, climate biota and the nature of the hinterland. A single tropical storm for a day leading to storm surges or a tsunami as we experienced in 2004 lasting for a few minutes, will produce more physical change in a beach than might have occurred over the previous 50 or 100 years. Further factors such as sea level change, changes in ocean chemistry can impact profoundly on the coasts and seas.

Sri Lanka is in a unique location falling within the equatorial belt in the northern Indian Ocean with the Arabian Sea on the west and the Bay of Bengal in the east and experiences two monsoons attributed to the change in ocean wind directions. Regional Ocean Modelling Systems (ROMS) have shown that the ocean currents, namely the Southwest Monsoon Current (SMC) and Northeast Monsoon Current (NMC), transports more and less sediments, respectively leading to coastal erosion on the west and coastal building in the east.

Impact of construction of Port City on ocean currents
It is reported that Lanka Hydraulic Ltd (LHI), a private company, had conducted an environmental study and the SLPA has obtained in 2011 an ‘Environment Evaluation Certificate’. However, the CEO of LHI has gone on record stating that “although an in-depth study has not been carried out by the LRH or any other institute, there is unlikely to be a major impact on the environment beach and l and erosion.” But with a rider “not rule out long-term impact on marine resources.”

It is strange that the Central Environment Authority (CEA), which is the legal entity charged with all matters connected with the environment on land or offshore, as well as Marine Pollution Protection Authority (MPPA), established by an Act of Parliament, the writer believes, were not involved. Further, the National Hydrographic Office (NHO) of NARA that does seasonal variation of ocean currents appears to have not been consulted.

The writer also likes to state under Section 16 of the Coast Conservation Act administered by the Coast Conservation Department (CCD), it is mandatory that a comprehensive EIA should be conducted by the project entity to obtain the Environmental Clearance Certificate (ECC). 

It is noted that the CCD was brought under the Defence Ministry, the secretary of which was also in charge of the UDA, a partner to the Port City administration, thus reflecting a glaring conflict of interest and it appears that the officials of the CCD were overawed and prevented in calling for an in-depth EIA. 

Comparison of Port City to Palm City Dubai The Palm City Dubai is in more calm waters without any reversal of ocean currents due to monsoon winds. Even in such an environment, the Palm City built on land reclaimed from the sea as envisaged here, the sea with altered wave patterns causing erosion to natural beach fronts. Accordingly, such damage to our coastline in a more energized wave front could cause severe sea erosion, causing a threat to the chain of beach resorts established along the southwest coastal belt with reversal of such wave energy, where its movement northwards is being blocked by the port city. 

It has been reported that the project proponents have obtained the services of URS, a leading environmental engineering group from the UK with branches in many parts of the world. There was a branch in Sri Lanka a few years back. This group had “conducted the consultation services of the Colombo Port Expansion Project to supervise the breakwaters of the Colombo Port City project are properly and accurately planned “and focused only on the safety of the construction of the breakwaters of this project. The study did not cover the aspects of coastal erosion south of the Port City and reclaimed land subsidence in relation to the load factors of the buildings, including skyscrapers. 

Legal issues related to Port City An enormous quantity of rock in the form of large boulders and off shore s and obtained by dredging the sea floor are required to construct the artificial offshore structure. The extraction of such nonrenewable resources are governed under the Mines Mineral Act No.33 of 1992 and it should be queried whether mining permits have been issued for such extraction by the GSMB and whether royalties and other fees collected as government revenue. 

The construction of artificial structures including islands is governed by the United Nations Convention on the Law of the Sea (UNCLOS) Part VIII Regime of Islands. However, since the artificial structure is connected to the sea, the provisions of Article 121 of UNCLOS may not apply. The artificial offshore structure will be subject to Part XII of UNCLOS – Protection and Preservation of the Marine Environment Section 1 General Provisions Articles 192 to 196.

The major issue involved is the ownership of 50 acres of this offshore structure by China on a 99-year lease. The materials used for the construction is from a sovereign state and any permanent land offshore will belong without any conditions to that state. As this writer is not an expert in international law, it is suggested that the Government of Sri Lanka (GoSL) should seek legal opinion locally on this aspect and what rights and obligations that the foreign entity will have on this offshore land area. 

Times of India reported on June 2, 2013 under the caption ‘China readies draft law for exploration of Indian Ocean’ and further stated; “China is working on a draft for international seabed exploration that would enable it to explore the deep sea resources of the Indian Ocean and other seas far from its shores,” an official source said.”
It is further stated, “The move is likely to worry New Delhi that keeps a close watch on China’s strategic moves in the Indian Ocean with the help of countries like Sri Lanka. Colombo recently supported increased Chinese presence in the Indian Ocean saying China needed to protect its sea trade routes.” Accordingly, the Colombo Port City will be the centre of focus by India. 

Recommendations Although it has now been revealed that the Colombo Port City was planned since at least 2011, the people were kept in the dark and no reliable information of this massive project was in the public domain. There was no effective law for right to information, especially the issues related were to affect the day-to-day lives the public as now envisaged. It is also unfortunate that all relevant government departments and agencies were not consulted and it is evident that there were conflict of interests within the SLPA and UDA, the two major project administrators, with the CCD being overawed as it was brought under the Defence Ministry that was also in charge of the UDA. The writer presumes that the CEA, MPPA and the NHO under NARA were not requested to actively participate in successfully conducting an EIA, a vital prerequisite for the project approval. 

The SLPA statements of realizing an income of US $ 20 billion by leasing the 450 acres of the reclaimed sea is without any foundation and is a presumption. The most critical issue involved will be the ownership of the 50 acres by a Chinese entity agreed by the GoSL without seeking legal advice by international law experts, especially those involved in UNCLOS, and not consulting the Foreign Affairs Ministry on our sovereign rights to this new land and offshore ocean areas. 

Since this project is now being highly debated, this writer would like to suggest the following: 4Suspend project activities until a comprehensive EIA is carried out to ascertain the long-term environment effects of this massive project unique to the northern Indian Ocean affected by high energy ocean currents. 

4Engage a multidisciplinary team of experts from the CEA, MPPA, NHO of NARA, Oceanographers, CCD and other agencies such as the GSMB, universities and other relevant agencies that the GoSL has identified. 

4Engage experts to apply satellite imagery and numerical simulations using Regional Ocean Modelling System (ROMS) that was run for three years focusing only on the southwestern coast of Sri Lanka (Contact Prof. C.B. Pattiarachi – School of Civil, Environmental and Mining Engineering and the UWA Oceans Institute, University of Western Australia e mail 4In order to monitor long-term impact of the Port City and institute remedial measures, it is recommended to formulate a Geospatial Framework for the Coastal Zone in Sri Lanka and periodically focus on National Needs for Coastal Mapping and Charting mostly by applying remote sensing –GIS systems. 

4Under International Maritime Organisation (IMO), Chapter 17 of Agenda 21, 1992 Convention on Biological Diversity (CBD), with our obligations of UNCLOS that Sri Lanka has ratified, a Strategic Framework for Particularly Sensitive Sea Area (PSSA) Concept has to be applied for the port city as Sri Lankan waters encompassing the Maldives have been designated as Marine Protected Areas and Global 200 Eco regions. Assistance from such global and regional level agencies especially IMO, IOC, SAECP, etc., may be obtained for this task. (Dulip Jayawardena, a retired Economic Affairs Officer United Nations ESCAP with experience in Intergraded Coastal Zone Management (ICZM), conflicting coastal land use and UNCLOS, can be reached at