Port City developer defends itself vigorously
No outlay by Colombo govt., 20 ha. freehold for developerFebruary 22, 2014, 5:50 pm
An artist impression of the Colombo City Port Project.
China Harbour Engineering Corporation (CHEC), handling the mega Colombo Port City Development, yesterday issued a detailed statement titled "Clarification on the Colombo Port City Project" vigorously defending itself against various allegations and statements recently made against the company.
Writing from an office on the West Tower of the World Trade Centre at Echelon Square, CHEC Port City Company (Pvt) Limited said that its parent, China Communication Construction Company Limited (CCCC) is a listed company in the Hong Kong Stock Exchange and the Shanghai Stock Exchange and a Fortune 500 company ranking top in ENR’s Top 225 international contractors for years.
CHEC described the project valued at USD 1.4 billion as ``the single biggest foreign direct investment to date to Sri Lanka’’ with the development of 233 ha of land by reclamation.
"125 ha of this development will belong to the Government from the date of project completion," the letter said. ``A further 88 ha will be owned by the Government but leased to the CCCC on a 99-year lease as part consideration for its investment. The balance 20 ha of this development will be given to CCCC on a freehold basis as a return on their investment."
The Government of China is the majority shareholder of CCCC which in 2005 was incorporated as a holding company under which the CHEC, established in 1980 was brought under, the project company said.
The Colombo Port City Project comes under the holding company CCCC and the implementation under the CHEC. Regarding the blacklisting by the World Bank of a related company, the statement said that China Road and Bridge Company (CRBC) group established in 1979 had also been brought under CCCC in 2005.Prior to becoming a subsidiary in 2002, CRBC had been invited to bid for the Philippines National Road Improvement and Management Project.
"During the course of bidding for this project the World Bank unilaterally announced sanctions on CRBC. This decision is being disputed by CCCC and a clarification announcement had been issued to the Hong Kong Stock Exchange in January 2009," the statement said.
"Subsequently, under the World Bank sanctions regime which ensures that successor organizations – through purchase or reorganization – will be subject to the same sanctions applied to the original firm, in July 2011, the World Bank announced that the sanctions imposed on CRBC in connection with the said Philippines National Road Improvement and Management project in 2002 would apply to CCCC as well. An appeal was also submitted to the World Bank."
"CHEC has been partnering Sri Lanka in major development projects for the past 15 years even before the company became a subsidiary of CCCC. One of the most significant projects is the country’s first major highway, the Colombo-Matara expressway. CHEC believes that Sri Lanka has great potential to become a regional business center for South Asia and continue to partner in mega development project such as the Colombo Port city," the statement said.
It also said that unlike previous projects undertaken by CHEC in Sri Lanka, this newest investment is fully funded by equity from CCCC and funds raised by CCCC with no fund from the Government of Sri Lanka or any government guarantee.
Further, ``there was no sound basis for direct and/or indirect allegations made that Chinese companies, in particular CCCC or CHEC may engage in corrupt practices," the statement said. "Specific legislative initiatives had been taken in China to leave no room for corrupt practices by Chinese companies."
It said as an example the Eighth Amendment to the Criminal Law of the PRC which came into force on May 11, 20111 specifically tackles this issue and makes it a crime to make payments to non PRC government officials and to officials of international public organization for any illegitimate commercial benefits.
Last Updated Apr 28 2017 | 07:37 am