The Hon. Nimal Palihena

¶ 01 Hon. Presiding Member, today we debate the rules and regulations presented under the Colombo Port City Economic Commission Act. First, let us be clear why the Port City was built. From the Opposition we heard charges—why do we, who criticized its construction then, now bring amendments and speak to strengthen it? We all remember the condition of the country we inherited—a broken state. Yet, within about a year and a half, according to the Central Bank’s 2025 report, we delivered about 5 percent growth and per capita income surpassing USD 5,000—indicators that reflect how strongly we have rebuilt the economy.

¶ 02 To meet national challenges we must manage the country successfully, or governance will falter. Therefore, irrespective of how it was built, attracting investment to the Port City is essential. It is our duty to provide facilities to draw foreign visitors and investors. These amendments serve that purpose.

¶ 03 Last year’s operational data show: typically, a departing Sri Lankan spends around USD 300 at duty-free, while an entering tourist spends around USD 150–153. Relative to 2024, we see improvement in 2025. The state levy on sales (the state share) in duty-free shops is 7 percent; raising collections through higher volume is a revenue pathway. If we enable more trade in this zone, we can retain foreign exchange here. If we create avenues to spend dollars domestically, we retain them for future needs.

¶ 04 Under the new amendments, within a one-year window, a traveler can make two transactions—up to USD 2,000 each—within four days per visit, instead of just once. Allowing two separate occasions within those four days helps retain more dollars domestically and supports industrial development and investment inflows.

¶ 05 On labor, Port City operations cannot always follow general national rules as-is if we are to attract investors and provide jobs. Following court rulings on employment contracts—particularly on termination—amendments have been introduced. While different from general norms, they will govern termination by contract terms between employer and employee, with awareness of the agreed conditions. Related penalties and compliance aspects are set out, aligning governance and lawful administration.

¶ 06 Given last year’s performance, we can expect better-than-anticipated progress. We aim to expand duty-free sales, grow the 7 percent state share, and fully utilize this special zone productively, not leave it idle. With the new duty-free and employment termination measures, we can reach our targets.

¶ 07 We had serious issues from loss of dollars and low reserves. Inflows come from worker remittances, investments, and trade around Port City including tourism purchases. Retaining and building reserves toward our targets is feasible through these steps. With confidence in these regulations and ongoing administration, I conclude.

¶ 08 Thank you.