Port City: Is it a priority for Sri Lanka at this juncture? (Daily Financial Times (Sri Lanka))

As informed in Parliament, the Prime Minister has appointed two committees to look into the development of the muchtalked about Colombo Port City and also decided to seek public opinion.
As the abstract given from the OECD publication of 8 December 2014, it is clearer that there are positive and negative implications to countries when developing and planning urban projects around mega ports.
Colombo city
Colombo is already an established port city. Relatively a low density population of around 1 million people live in city against a comparison of 20 million in Mumbai.
However, as the business hub of the country on any given day, an extra 35 million people enter the city of Colombo for work and business, creating major traffic blocks, drainage issues, garbage issues, space for cargo handling, etc. Hence, Colombo has its own problems to fix. The need for much better infrastructure for city itself is a priority.
On the shipping side, Colombo being a major transhipment hub for the Indian subcontinent and developing into a mega port in this part of the world needs to further upgrade its internal infrastructure of the SLPA itself to be competitive and efficient. These are of greater priority than the Port City in my opinion.
Economic feasibility for Port City
On the other hand, if an economic feasibility study has been done on the Port City, some questions that would need answers are: What would be the impact to the existing Colombo land and asset market? Were the local chambers/businesses consulted? What price was land valued at and what percentage is to be given to the investor? What implications are there for mega development projects of local private sector investments that have already taken off? What are the economic gains the country will enjoy (the ROI)? Is there any free hold of land after lease arrangements to the investor? Why a 99year lease instead of a 33year one like in Singapore? What about border integrity? What will be the burden/impact on current infrastructure in Colombo?
Environment factor
The Environment factor (EIA) should be a must in any mega project, but in this case logically it should not be a problem as we have built a 6.5km breakwater in the south harbour project (which was given EIA clearance) adjacent to the said development and reclaimed areas for the harbour basin and to build a massive land terminal area of nearly 600 hectares for ship operations.
The impact of yet another breakwater to claim land should not be a technical obstruction, unless we had a special coral reef area of ocean geography, etc.
The international experience
If one looks at this part of the world, Singapore, Dubai, Hong Kong and Mumbai are major port cities. Except for Mumbai other major port cities are small islands or deserts known as city states and do not have hinterland or adjacent suitable land to expand urban development in a practical manner.
Hence Dubai, Singapore and Hong Kong have no other options but to reclaim land from the ocean to expand its waterfront for maritime purposes, tourism and aviation activities which contribute largely to their economies.
Secondly these city states have their own financial capacity to develop such expansion without foreign investment on reclamation and in redefining borders and border controls.
In comparison to Sri Lanka’s per capita of $ 3,200, Singapore is $ 55,000, Hong Kong’s $ 36,000 and UAE $ 43,000. This economic strength explains the ability of those countries to go into mega projects including land from the ocean and then invite investors to come into those countries subject to stipulated land laws and rules of investment by the host country.
Mumbai was the only city reshaped by the Hornby Vellard Project, which undertook reclamation of the area between the seven islands from the sea. Along with construction of major roads and railways, the reclamation project, completed in 1845, transformed Mumbai into a major seaport in the Arabian Sea. Today Mumbai has 20 million residents and is a mega city of the world and is going into reformation with modern infrastructure including sky rail.
Sri Lanka capital city experience
Let us go back to the 1980s. The city of Kotte was recreated as the capital city by the late President J.R. Jayawardene. Today Kotte and the Sri Jayawardenepura area suburbs have developed into major urban areas through which Colombo had the ability to expand for commercial development.
Shouldn’t the Western Province and greater Colombo area be developed as a mega metropolis where a larger number of people will benefit since 30% of the country’s population lives in these areas?
Isn’t east terminal bigger priority than Port City for SLPA?
Now that the big ships of over 10,000 TEU to 19,000 TEU are common and more will enter the market in 2015, isn’t it priority that the Government expedite the east terminal of the south harbour for ensuring business continuity for the SLPA? If this is not done JCT and the Sri Lanka Ports Authority will start losing business and revenue sooner rather than later, which will have serious consequences for the Government.
On the other hand one of the biggest problems with the Colombo Port is that there is no commercial land to expand logistics activity, this includes proper rail connectivity to the terminals of the port which could reduce road congestion. Although declared a free port, no land is available for local or international logistics companies to set hub operations within the port of Colombo.
If the argument is that Colombo needs more waterfront commercial land, then the urban planners of the country must guide the Government toward gradual expansion on to the ocean as per demand and give our private sector the first choice to develop the same if needed with joint ventures.
If at all it would have been better that part of this reclaimed land be allocated for a Colombo port free zone with a provision for waterfront development area for recreation, etc. This would have further facilitated the hub concept which was introduced in 2013 under the Finance Act.
The question arises whether we in Sri Lanka need to fill the ocean at great cost to develop a recreational city and waterfront? Will it help to expand the maritime economy or isn’t there any other priority in the maritime sector to develop? Is this a priority project at this juncture?
On the other hand, if there are commitments made to China can they be restructured? These are some of the questions that the committees will have to provide/recommend to the Government.
The writer is the CEO of Shippers’ Academy Colombo, an economics graduate from Connecticut State University USA, senior consultant Ports and Aviation SEMA, Past Chairman Sri Lanka Shippers’ Council and immediate Past Secretary General of the Asian Shippers’ Council