Foreign Direct Investment (FDI) is where foreigners invest in infrastructure in the beneficiary country, in this case Sri Lanka, for the long-term. Because the investment is in infrastructure, the value will permanently remain in Sri Lanka, and can continue to create even more value through trade and commerce. This helps to bridge the Balance of Payments gap and strengthen the local currency, while creating new economic opportunities for locals. Port City Colombo is Sri Lanka’s biggest FDI project, with billions of dollars waiting to flow in, but investors are hesitant as the Port City Colombo Special Economic Zone regulations are not yet finalized.

Speaking at the Sri Lanka Economic Summit 2022, held at the Shangri-La Hotel in Colombo on the 5th and 6th of December 2022, Thulci Aluwihare, Deputy Managing Director at CHEC Port City Colombo (Private) Limited said, “We’re unable to execute our marketing strategies and proceed with other matters of logistics and outreach until the regulatory framework, as provided for by the Colombo Port City Economic Commission Act, is finalized and published by the Government of Sri Lanka. We cannot make any official representations to any parties until this is completed, and until there is clarity over regulations related to taxation. If these matters aren’t finalized soon, it may send the wrong signals to investors and cause them to become hesitant, which will impede the progress of development, which at present is proceeding exceedingly well.”

With infrastructure development slated for completion by Q3 of 2023, Port City Colombo is Sri Lanka’s biggest FDI-funded development project with USD 1.4 Bn committed by the project company, USD 1.2 Bn already having been invested, and a further USD 1.5 billion expected to flow in during the vertical development phase, which will commence thereafter. A USD 7-million Duty-Free Shopping Mall, the first of its kind in South Asia, and a magnet for shopping and tourism, is also expected to open doors at Port City Colombo in April 2023.