The Hon. Rauff Hakeem, Attorney-at-Law

¶ 01 Bismillahir Rahmanir Raheem.

¶ 02 Hon. Deputy Chairperson of Committees, the Hon. Bimal Rathnayake, the Leader of the House, informed us of the passing away of our former distinguished Secretary-General, Mr. Nihal Seneviratne. I add my tribute from the Opposition. When I first entered Parliament in 1994 and served as Deputy Chairman of Committees, Mr. Seneviratne’s guidance as Secretary-General was a great strength. He was a fine gentleman, a loyal Royalist, and served this House with distinction. I convey condolences to his family, particularly to his son Satyajit, my contemporary at Royal College.

¶ 03 Before addressing today’s Amendments to the Colombo Port City Economic Commission Act, I wish to refer to the recent disaster caused by Cyclone “Ditwah”. India, Pakistan and others sent Rapid Deployment Forces. I am grateful especially to the UAE Search and Rescue Team for their expert assistance in areas like Deltota and Galaha that were cut off by landslides. They coordinated with local authorities, assessed the hospital, water schemes and schools, and promised to seek support from their Government for health, water, employment-generating industries and resettlement. I also thank the Emir of the UAE, Sheikh Mohamed bin Zayed Al Nahyan, and their Embassy for dispatching the team.

¶ 04 I must also highlight cyclone impacts in Karaitivu–Chinna Nagavillu, Puttalam. Over 25 houses remain inundated, yet a Government MP claimed here yesterday that floodwaters had receded. That statement is incorrect and condemnable. People still cannot return home and are seeking allocation of State land and support for alternative housing. Colleagues who visited, including Hon. Hisbullah, can confirm the situation.

¶ 05 On the Amendments: they bring clarity after a period when Regulations lapsed and had to be re-enacted, creating uncertainty among investors. However, these changes appear aimed at satisfying the IMF, which seeks higher revenue. In negotiating with the IMF, we must ensure the country remains investment-competitive. Compared to Macau, Mauritius, Dubai, Singapore, and other hubs, our revised concessions may not attract investors if previously granted incentives are reduced.

¶ 06 I cite the BOI Chairman, Mr. Arjuna Herath, in the Daily Mirror: “IMF acts as biggest impediment in drawing Foreign Direct Investments to Sri Lanka as policies render country unattractive.” He reportedly tendered his resignation and noted that any BOI incentive beyond the current framework needs the IMF’s approval, and that Sri Lanka offers no compelling reason for relocation under the current tax policy.

¶ 07 At the Committee on Public Finance, we questioned Port City Commission officials. There seemed differences even within the Commission about whether the revised incentives suffice. Experienced members like Dr. Harsha Subasinghe argued for zero per cent personal income tax for employees; otherwise, who would relocate with a 36 per cent PIT? The revised 7.5 per cent CIT for IT exporters within the zone compares poorly with zero-tax zones elsewhere, and 7.5 per cent may still be uncompetitive relative to other countries.

¶ 08 On real estate: they expect US$ 14 billion if all 74 plots are allocated, with a further US$ 13 billion value addition—about 13 per cent of GDP. But so far, only 3–4 developers are near commitment, aiming to start in Q1: a marina, a residential parcel, a mixed-use parcel, and a hotel parcel. Combined, they may bring only US$ 1.2 billion versus the US$ 14 billion target. We advised them to consult the Department of Census and Statistics to verify realistic value-add numbers.

¶ 09 We all wish the Government’s vision succeeds, but investor confidence may be hampered if incentives are downsized to meet IMF dictates. Let us hope the new Regulations will still attract sufficient investment.

¶ 10 Thank you.