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Tuesday, 02 August 2016 13:25

DECISIONS TAKEN BY THE CABINET OF MINISTERS AT ITS MEETING HELD ON 01-08-2016 Featured

Published in Cabinet Decisions

01. Colombo Port City Project / Proposed Financial City Project – Proposed amendments for the agreement signed in September 2014 (Document No – 06, 07, 08 and 09)

 

Given below is a summary of changes which are suggested to incorporate in to the original agreement signed in September 2014.

 

Free hold lands

 

•    According to the agreement signed in September 2014 signed by the previous government, a land of 20 hectares will be granted to the C.H.E.C. Port City (Pvt) Ltd on free hold base and the rest land is granted on 99 year lease basis.

•    According  to the consultations of the new government, no land will be granted on free hold basis, and all the lands will be on 99 year lease basis. If the government does not require these 20 hectares, the company may obtain the land for another 99 years.

 

Role of the Sri Lanka Ports Authority and the Urban Development Authority

 

•    According to the original agreement the Ports Authority Act is to be amended to enable the Ports Authority to obtain 62 hectares from the project company for its use and development activities. According to the article 6 of the act, this is limited to the objectives of the Ports Authority. Though the previous government has declared that Sri Lankan lands could be used for development of immovable properties, no such authority is granted under the article no. 6.

•    Under the new agreement, the Sri Lanka Ports Authority will not be assigned of immovable properties development and its responsibilities will be limited to activities allowed by the current Sri Lanka Ports Authority Act. Therefore, it has been decided that the most suitable institution to assign reclaimed lands is the Urban Development Authority.

 

Role of the Ministry of Megapolis and Western Development

 

•    Under the new agreement, responsibility of performing government responsibilities including amendment of the Sri Lanka Ports Authority Act is vested with the Ministry of Ports and Shipping.

•    Instead of the agreement signed by the previous government on 16 September 2014, a new trilateral agreement will be signed among the Ministry of Megapolis and Western Development (on behalf of the government), UDA and the project company.

 

Legal situation of the lands proposed to be filled

 

The status of lands to be filled is unclear under the original concessionary agreement signed by the previous government. Those lands are not a part of  the Colombo District. Hence, it is not considered as a land belonging to the Sri Lankan territory according to the article 5 of the Constitution. Under the new law, the land will be brought into the Administrative District of Colombo, and it will be assigned to the proposed Financial City Corporation out of the Colombo Municipal Council.

•    According to the original agreement a key tax plan will be implemented by the Sri Lanka Ports Authority related to leasing of lands to the project company.

•    Under the new agreement, filled lands will be gazetted by H.E. the President under the Lands Ordinance and thereafter will be allocated to the UDA. The UDA will declare them as a development area under the Urban Development Authority Act. This will happen before land is leased on 99 year basis to the Project Company.

 

Fishermen's Income Support Programme

 

•    Under the original agreement, responsibility for funding the income support programme to fishermen was a responsibility of the SLPA. No such programme was implemented by the previous administration of the SLPA.

•    Under the new agreement, the project company will allocate Rs. 500 million towards the fishermen's income support programme to the Ministry of Megapolis and Western Development to implement the programme in consultation with the Ministry of Fisheries and Aquatic Resources Development.

 

Utilities and transport infrastructure

 

•    Under the original agreement all investments in roads and utilities within the reclaimed area was the responsibility of the project company while providing all utilities and road infrastructure to the periphery of the site was the responsibility of the Government of Sri Lanka.

•    Under the new agreement, the possibility of undertaking public-private partnerships through the project company will be evaluated as a long term solution to ease the GOSL's responsibility of undertaking provisions of road infrastructure and utilities to the periphery of the site.

 

Management and maintenance of the reclaimed area

 

•    Under the original agreement, an Estate Management Company (EMC) 100% owned by the GOSL would manage, maintain, and repair the common areas of the Port City by collecting management charges from investors. However, until such time EMC is self-sustainable, GOSL or SLPA would have had to inject funds for the operation of the EMC.

•    In order to ease the GOSL's obligation to fund such a venture, under the new agreement, the project company has agreed to consider establishing and operating the EMC in partnership with GOSL.

 

Limits imposed on developing GOSL lands

 

•    The original agreement limits developments GOSL could undertake on its land during three years from the completion of reclamation to educational and cultural activities only.

•    Under the new agreement the above has expanded in favour of the GOSL to include healthcare and hospitals and exhibition and convention centres and the new Colombo International Financial Centre. Also no restrictions will be placed on developing the North and West ports of the Colombo Harbour. In addition, the project company has agreed to setting up the CIFC building in the land area reclaimed first including making a new investment in the CIFC building no sooner it is technically feasible to build on reclaimed land and upon mutually acceptable terms being agreed with the GOSL after a feasibility study.

 

Compensation claims

 

•    In view of the goodwill created by the visits of His Excellency the President and the Hon. Prime Minister to China, the project company has agreed to withdraw all compensation claims for losses incurred due to the suspension of the project caused by the failure of the previous administration of the SLPA to obtain the required environmental permits.

•    In their original Master Plan there was provision for night racing. They had fully abandoned that plan at present. In view of this, a large extent of marketable land becomes available. Out of this, 2 hectares may be allocated to them, without reducing the land extent of 62 hectares owned by the GOSL. This will be a gesture to reciprocate their goodwill in completely waiving off all compensation claims.

•    The above proposal was acceptable to the GOSL since the project company has agreed in the new master plan approved by the UDA this year to increase public lands (parks, roads, walkways, etc. to be used by the general public) by 28 hectares more than originally planned to make Port City more attractive to the public. For example, when completed port city will have 45 hectares of parks and 13 hectares of artificial beaches (compared to 5.7 hectares available to the public at Galle Face Green).

 

Environmental approvals

 

•    Under the original agreement, the responsibility for undertaking and financing all environmental approvals for the project was a responsibility of the SLPA. There were shortcomings in the environmental approvals obtained by the former administration of the SLPA.

•    A comprehensive new supplementary environmental impact assessment was carried out by the Ministry of Megapolis in 2015 to address such shortcomings with the cooperation and funding extended by the project company.

 


New environmental conditions

 

•    Under the original environmental impact assessment study carried out in 2011, 42 conditions were imposed by the Department of Coast Conservation in its development permit.

•    Under the new supplementary environmental impact assessment carried out by the Ministry of Megapolis for 269 hectares of reclaimed land and made available for public comments in December 2015, the new development permit issued by the Department of Coast Conservation includes 70 conditions to mitigate the impact on the environment.

 


Change of status

 

•    The previous administration had this as a Land Reclamation Project to utilize this initially for real estate, sports, education and cultural development including night racing tracks etc. Therefore, the bulk of the land was not available for real estate development by the government.

•    Now it has been agreed with the Chinese Government that this land is being used to build a Financial City to fill the vacuum between Singapore and Dubai. This will enable offshore operations. For this purpose, the government will propose new laws for governing offshore activities like in Dubai.  The Financial City will make a major income earner and an employment provider for Sri Lanka.

 


02. Granting of state land on long term lease towards the construction of 'Resource Centre' for Sri Lanka Administrative Service Officers (Document No - 10)

 

The proposal made by Hon. Prime Minister Ranil Wickremesinghe, in his capacity as the Minister of National Policies and Economic Affairs, to grant a land in Battaramulla area to build a Resource Centre for officers of the Sri Lanka Administrative Service, which is considered as the prominent and most important public service in implementing public policies in national, provisional and divisional level, was approved by the Cabinet of Ministers.

 

03. Establishment of Tri Forces Central Ammunition Armoury and Commercial Explosive Armoury complex in an area with low population (Document No - 11)

 

In the period which the conflict was on progress at North Eastern areas, ammunition and explosives were stored temporarily in various places, and in 2011 the cabinet has approved the establishment of an armoury complex in the international standard in an area with low population. As it is suitable to store armaments in an area with low population, the proposal made by H.E. the President Maithripala Sirisena, in his capacity as the Minister of Defense, to build an armoury in Oyamaduwa area of the Anuradhapura District in the international standard, was approved by the Cabinet of Ministers.

 

04.    Establishment of Human Resource Service agency (Document No - 13)

 

According to the proposal made by the Hon. Prime Minister to establish a Human Resources Service Agency (HRSA) with the view of obtaining the service of professionals for national policy making and efficient implementation of development programmes, the cabinet has already approved to incorporate the said agency under the Companies Act No. 07 of 2007. Accordingly, the proposal made by Hon. Prime Minister Ranil Wickremesinghe, in his capacity as the Minister of National Policies and Economic Affairs, to obtain a grant of Rs. 5 million from the consolidated fund to fund the initial capital of the agency and to obtain the service of a private legal service provider for incorporation of the said agency, was approved by the Cabinet of Ministers.

 

05.    Reconstruction/restoration of temples and places of worship damaged due to war in Northern and Eastern Provinces (Document No - 14)

 

Due to the war prevailed in Northern and Eastern Provinces for a long period many temples and places of worship have been damaged. Requests have been made to assign renovation of them directly to Trust Boards of respective temples/places of worship instead of following the tender procedure. Considering the nature of such constructions and financial and physical aids from local and foreign sources, and the labour contribution, steps have been taken to assign the renovation/restoration of temples/places of worship to management/trust board of respective place of worship under the direct supervision of District Secretaries and Divisional Secretaries. Above information presented by Hon. Prime Minister Ranil Wickremesinghe, in his capacity as the Minister of National Policies and Economic Affairs, was considered by the Cabinet of Ministers.

 

06.    Granting of loans for small and medium enterprise sector development and employment generation (Document No - 15)

 

An amount of Rs. 19,875 million has been allocated by the 2016 budget for the Rural Reawakening Programme for the development of all Grama Niladhari Divisions in the country through developing livelihood and infrastructure of the people all over the country. The proposal made by Hon. Prime Minister Ranil Wickremesinghe, in his capacity as the Minister of National Policies and Economic Affairs, to implement a programme called 'Small and Medium Enterprise Sector Development and Employment Generation' with Rs. 4,000 million of the above funds with the view of generating more employment opportunities in the SME sector, was approved by the Cabinet of Ministers.

 

07.     Implementation of short term priority water supply improvements in Matara District (Document No - 17)

 

Two separate water supply schemes are being implemented for Matara and Weligama Urban Council areas and Pradeshiya Sabha areas. With the increasing demand their capacity is not sufficient. As a solution to the above issue, it has been decided to implement the 'Matara Stage IV Water Supply Project' and it is to be completed in 2019. Until it is being done, the proposal made by Hon. Rauff Hakeem, Minister of City Planning and Water Supply, to implement the tasks for improving the capacity of Malimbada and Hallala Water Treatment Plants as a short term measure at an estimated cost of Rs. 477 million, was approved by the Cabinet of Ministers.

 

08.    Proposed amendments to the Regulation of Insurance Industry Act No. 43 of 2000 (Document No - 20)

 

The Insurance Board of Sri Lanka was established by the Regulation of Insurance Industry Act No. 43 of 2000 for facilitating the development, supervision and regulation of the insurance industry in Sri Lanka, and was subsequently amended by acts No. 27 of 2007 and No. 03 of 2011. The cabinet of ministers have granted the approval in 2013 to make several amendments including changing the Insurance Board of Sri Lanka into Insurance Regulatory Commission of Sri Lanka, and accordingly the amended bill has been prepared by the Legal Draftsman. The proposal made by Hon. Ravi Karunanayake, Minister of Finance, to instruct the Legal Draftsman to finalize the bill by adding the amendments recommended by the Insurance Board to provide a level playing field for foreign and local insurance companies, and to present the bill in parliament after obtaining the clearance of the Attorney General, was approved by the Cabinet of Ministers.