The Danger of Misunderstanding the Port City
By Shivanthi Ranasinghe
Sri Lanka Podujana Peramuma MP Gevindu Kumaratunga too has voiced his concerns over the proposed Colombo Port City Economic Commission Bill. He insists that all members of this Commission must be Sri Lankan citizens. While his point is debatable the more contentious issue is that the project, expected to create 83,000 direct employment opportunities, is gaining a great deal of negative publicity. State Minister of Money, Capital Markets and State Enterprise Reforms Ajith Cabraal and incumbent Secretary to Ministry of Water Supply Dr. (Eng) Priyath Bandu Wickrama, who was involved in the pioneering team of the Colombo Port City project, are making a valiant effort to educate the public on the true concept of this Port City project model. However, when the fear mongering is coming from within the Government itself there is a danger that this project too will suffer a similar fate as the Hambantota Port.
The Hambantota Port was a project that was envisioned since 1920s. Ranil Wickremesinghe’s UNP Government in 2002 under the project proposal ‘Regaining Sri Lanka: Vision and Strategy for Accelerated Development’ was very keen to build this Port. Most unfortunately, the Canadian Government funded feasibility study by the Canadian company SNC Lavalin led the UNP government around the mulberry bush and the project was stabbed in the back and heart even before it began.
When the Mahinda Rajapaksa Administration took the challenge and actually delivered the Port Ranil Wickremesinghe was like the proverbial fox who could not get his grapes. He ridiculed the Port in the most ridiculous manner.
The Port was built in three distinct phases. However, a junior engineer pointed out to his superiors that it would be best to remove the hard rocks that was scheduled for the second phase in the first phase itself. Accepting this logic, the decision was taken to remove these rocks in the first phase and not the second.
This was completely distorted by Ranil Wickremesinghe who claimed that the Port was dysfunctional due to a big rock in the middle. He thus jeered that the Port was nothing more than the world’s largest swimming pool. Interested parties, especially those with geopolitical plans, also partnered with the UNP-led Opposition political parties to mock and discredit the Port.
As the then Administration could not effectively communicate to the people the master plan with the Hambantota Port and the Maththala Airport as the epicenters and the benefits the country would accrue Ranil Wickremasinghe’s absurd stories gained credibility. Even senior journalists believed that these two strategic assets were just ego boosts to the then President Mahinda Rajapaksa and denounced these as “white elephants”.
It was only when the Yahapalana Government violated all procedures and logic to hand the management of the Port to China on a 99-year lease that people realised the strategic importance of the Port. The workers at the Port and residents of the area vehemently protested at the ongoing transaction. During this protest, ships were unable to enter the Port leading to a long queue waiting out in the deep sea. This development exposed to the whole country the falsehood that projected the Port to be lying idle with all ships bypassing it. Instead, the events proved the Port to be a busy hub with ships, including the largest vehicle carriers, calling regularly at the Port for its services.
Likewise, if the negative propaganda on the Port City model that is being created both by mischief-makers and parochial politicians is not effectively countered with true facts and the project’s real ideology, the people of the country will not appreciate the project’s actual potential. If people begin to fear the Port City project and view it antagonistically as they did with the Hambantota Port, it would be easy for anti-Sri Lankan elements to manipulate it to their advantage.
It is noteworthy that the Yahapalana Government was loyal to the West. As far as the Yahapalana Government was concerned the International Community was the West. The leaders of the Yahapalana Government gloated over the pat on the back from western leaders and gloveless handshake from the Queen of England as proof of winning over the International Community, which they claimed was estranged by the Mahinda Rajapaksa Administration. Clearly, the Yahapalana Government did not recognise the strong relations their predecessor had with China and Arabian countries. The implicit implication thus was that these countries, as far as the Yahapalana Government was concerned, were not part of the International Community.
In this context it is very curious that the Yahapalana Government chose to hand over the Hambanthota Port to China and only to China. The American Embassy, the first to sound the gong of gloom over the Port City model, did not utter a word against this long term lease of this national asset with strategic and security implications to the entire region. The consequences, from making India vulnerable that might have further propelled our neighbour into the arms of the anti-Chinese Quad, should not be dismissed as coincidences.
The Hambantota saga must serve as an important lesson for Sri Lanka. Had it not been for ignorance, the Yahapalana Government would have never been able to lease the Hambantota Port to China or privatise it in any manner.
Chief Operating Officer of the independent policy think tank Advacata Institute Dhananath Fernando observed during an interview with HiruTV that many in Sri Lanka still have not understood the concept of a port city.
“A port city is a special economic zone,” he explained. “A special economic zone is necessary to enable entrepreneurs to conduct their business matters with ease.”
The necessity for Sri Lanka to adapt such an economic model is greater as the prevailing laws and procedures is not to optimum, he noted. In the Ease of Doing Business index Sri Lanka holds the unsatisfactory 99th position out of 160 countries. Our neighbour India is positioned about 30 ranks ahead of us. With such an unfavorable rating it is difficult for Sri Lanka to attract new investors. This is attested by the paltry number of new investments that the country had attracted over the past two decades. This situation thus underscores the need for Sri Lanka to adapt special economic zones, Fernando emphasised.
“A misconception held by many is that generous tax concessions would attract investors,” he further elaborated. “However, it is not a good strategy. The potential investors into the Port City are looking at projects that are worth around USD one or two billion. More than tax concessions these entrepreneurs are interested in the ease of doing their business functions.”
Furthermore, he noted, tax would be paid only after a profit is earned. Therefore, for an investor it is more important to find an environment where they can do their businesses with ease as well as quickly resolve legal disputes pertaining to their business. It is therefore in this angle that this project must be looked at when promoting it.
The parliamentarians, tasked with the management and development of the country (and not their political career or image) must take their responsibility more seriously. As such, they must make every effort to study and understand the Port City project for its worth. It is indeed a matter of great concern that none of these politicians had questioned the Minister or State Ministers tasked with the country’s education what steps are taken to gear our education so that Sri Lankans can effectively compete for the 83,000 employment opportunities that this project is expected to create.
When the regulations created by the proposed Economic Commission must be passed in Parliament, the nationality of the Commission members is really a moot point. Instead, our focus must be to try and attract the Sri Lankan expatriate community to contribute their knowledge and expertise to the benefit of our economy.
After all, it is our experience that the most treacherous acts against Sri Lanka as the Millennium City fiasco that exposed our military intelligence unit to the LTTE, the signing of the 2002 Cease Fire Agreement that gave parity to a proscribed terrorist organisation with the legitimate government of the country and co-sponsoring the UNHRC Resolution 30/1 against Sri Lanka and its military were done by those who were Sri Lankan citizens.
On the other hand, on the mere basis of citizenship one cannot overlook the immense contribution by great personalities as Sir Henry Steel Olcott, venerable S Mahinda Thero or for that matter Gotabaya Rajapaksa, who held dual citizenship with the US when he functioned in the capacity of the peace winning Defense Secretary. Therefore, the law makers must grapple with the realities instead of rhetoric and properly do the job they were elected to do.