(This article was originally published in Daily FT on 11th August 2016)

By Ashwin Hemmathagama – Our Lobby Correspondent

Prime Minister Ranil Wickremesinghe in Parliament yesterday justified the Government’s decision to continue the Port City project despite promising in an political manifesto to the public that it would be halted.

Port City Project

Port City Project

“We have decided to sign an agreement which will develop the country and uplift the economy. But with the previous Government’s agreement we had to pay a considerable demurrage if the project was discontinued. By that time the Chinese company had also made a considerable investment. However, we came to an agreement with them to remove the demurrage claim. There will be a requirement of 3.45 million cubic meters of rocks for the Port City project and it was obtained from licensed quarries in the Colombo and Gampaha districts. Sand is pumped from the sea 4 km away from the beach. It is estimated that Rs. 1.83 billion will be spent for the rock and Rs. 117.14 billion will be spent for the sand,” he said.

According to the Prime Minister, mega projects should be started with a vision and plans to develop the economy. “Projects started without a vision or plan can leave long-term losses. Recently we prepared the Megapolis Plan for the Western Province and the changes necessary in the Port City project were also identified. So approval is now being given to major projects to meet national development requirements. According to the new agreement, we will not give them the land and the limitations on the Government lands are also removed. Instead of night racing they have agreed to construct an international financial centre. They have also agreed to invest Rs. 500 million to minimise the impact on fishermen,” he added.

“There were several reasons to discontinue the Port City project launched during the previous Government’s time in power. The key reason was a development permit, which was not obtained by assessing the environmental impact. Going against the current Government’s policies, the previous Government agreed to provide land to the Chinese company. The project agreement was not tabled in the Parliament and it was more favourable to the Chinese company. We appointed a committee and as a result the project was halted in March 2015. A development permit has been obtained by following the proper procedures and the environmental impact assessment. According to the conditions of this permit, reclamation should be done with minimal damage to the environment. Both of us, the President and I, spoke about this project during our Chinese visits. We convinced them that it was an unfair agreement and reached an understanding. So now a tri-party agreement between the Megapolis Ministry, the Urban Development Authority and the project company is being prepared. It will be signed soon,” Prime Minister Wickremesinghe revealed.