China-Built Port City Plan Challenged in Sri Lanka’s Top Court

Sri Lanka’s Supreme Court on Monday began hearing petitions challenging President Gotabaya Rajapaksa’s plan to set up a panel to lure investment into a Chinese built port city in Colombo.

The court is considering petitions from about 20 individuals and organizations concerned about the constitutional integrity of the panel overseen by the president, and the lack of direct oversight by regulators, including the Central Bank of Sri Lanka. The government introduced the Colombo Port City Economic Commission draft bill in parliament this month.

For parliamentarian Harsha de Silva, a member of the main opposition Samagi Jana Balawegaya, the move to allow the president to appoint the board and chief executive officer of the commission adds to Rajapaksa’s authority. The president last year succeeded in a bid to amass executive powers for his office after his government won a super majority vote to amend the constitution.

The port city “will catalyze the next phase of growth, however for this to work, we want to make sure that it is done right,” said de Silva, who was involved in developing a first draft for a law administering the Colombo Port city when in government.

Meanwhile, the Sri Lanka Bar Association in its challenge said the bill infringes on judicial functions and may violate articles of the constitution dealing with the unitary state and sovereignty of the people. Some lawmakers and Buddhist clergy linked to Rajapaksa’s party have also opposed the Commission, calling it an attempt to form a Chinese colony.

Sri Lanka has been one of the countries drawn to China’s Belt and Road Initiative. The port city in Colombo, being built by China Communications Construction Co., also has a plan to build a financial district -- pitched as a new hub between Singapore and Dubai -- with a marina, a hospital, shopping malls, and 21,000 apartments and homes.

Concerns over the port city being a Chinese colony are misplaced, and the project will be a source of non-debt inflows that will help drive growth by reducing red-tape faced by investors, said State Minister for Money and Capital Markets Nivard Cabraal.

The Colombo port city has been exempted from a number of laws and agencies to improve the ease of doing business, Cabraal said, although it’s kept rules against money laundering.

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