The Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Finance and Planning

¶ 01 Hon. Speaker, the Regulations presented today for approval relate to the Colombo Port City Economic Commission Act, No. 11 of 2021. Under Section 71(2)(a), the Colombo Port City Development Regulations, No. 1 of 2023, were published on 2 June 2023 to regulate buildings, structures and their characteristics within the Port City. The first amendment was made in November 2023. We now present the second amendment for Parliamentary approval. The aim is to promote investments and facilitate investors. We are moving to a rule-based approach for investment facilitation, without favouring or disadvantaging any party, to secure sustainable medium- and long-term growth.

¶ 02 In our last Budget Speech, we laid the foundation to achieve an economic growth rate exceeding 7 per cent. To move forward, attracting investment is key. This second amendment addresses several main areas. One is land use expansion. While the overall extent remains unchanged, we accommodate investor requests and evolving needs, as proposed by the Commission at its 60th sitting and approved by Cabinet.

¶ 03 Key adjustments include: under Regulation 47, resizing certain land extents for common facilities to enhance them; separating the previously combined “culture and health” category into two for easier handling; addressing public utilities; and, under amended Regulation 48, specifying parameters for open spaces (parks and squares), coastal-related sections, public streets and public transport facilities, and how these are to be implemented.

¶ 04 These changes are subject to conditions. The total aggregate remains unchanged; only reallocations within it are allowed. Investor plans must be justified, including benefits to the enterprise. Traffic circulation should not be impeded; internal mobility must be safeguarded; and new conditions should not increase externalities. A land use and services-use matrix is presented, setting limits across sectors: for example, we reduce the limit for residential-related retail to 5 per cent. We define allocations across offices, services, education, health, community, social and cultural, open and leisure, sports and recreation, transport, etc., which we consider highly conducive for investment attraction.

¶ 05 Alongside incentives, investor confidence is crucial. In the past, decisions regarding entities like Emirates and Etisalat diminished confidence. Beyond these amendments, we are strengthening the legal framework to rebuild trust. Last year, we presented a large slate of investment-related laws.

¶ 06 Some ask why passing laws matters. Laws must be given life through implementation, which requires political will. We have coupled that will with every law passed. Recently, we debated the Anti-Corruption Commission Act; its 2023 iteration strengthened independence. We will also bring further bills:

¶ 07 - Public-Private Partnership Act: in its final stages; targeted for April/May this year. - Investment Protection Act: now with the Legal Draftsman; to be brought this year, setting clear rules on returns, repatriation, and the conditions and procedures for any State intervention, including compensation. - Investment Promotion Act: revising the earlier BOI draft to strengthen and systematize promotion and management of investments. - State-Owned Enterprises reforms: amendments to focus on preventing market distortions, enhancing efficiency, and granting appropriate decision-making autonomy; bringing selected commercial SOEs under a holding structure. - Insolvency Act: to support businesses before collapse. - AML/CFT framework: amendments to the Prevention of Money Laundering Act, Financial Transactions Reporting Act and Suppression of Terrorist Financing Act; ongoing work toward the AML/CFT framework review scheduled for May.

¶ 08 On investor confidence, debt restructuring was essential to restore stability. We successfully restructured ISBs to move ratings up to CCC+ in 2025. One obstacle remained: the US$ 175 million SriLankan Airlines bond guaranteed by the Treasury. I am pleased to inform the House that, based on agreement between the Ministry of Finance and SriLankan Airlines, around 99 per cent by value and 97 per cent of lenders by number have consented to the restructuring; the press release is due today.

¶ 09 Our ISBs, which were trading at deep discounts, have risen closer to par and coupon yields, showing growing stability. We are confident that these amendments, together with current conditions, will further strengthen investor confidence and lead to ratings upgrades within this year.

¶ 10 We also pioneered the world’s first governance-linked bond in the debt restructuring, tying outcomes to governance indicators. We have achieved the IMF’s primary governance benchmarks and realized savings of about US$ 70 million as an outcome, and completed roughly 50 per cent of ancillary indicators.

¶ 11 Hon. Speaker, these amendments ease investment into the Port City, promote its development, and strengthen the investment climate — vital after achieving macro stability in 2025 under difficult conditions. While external war conditions have affected oil supply and logistics, domestically there is no crisis. Government revenues are stable, expenditure is managed, and the fiscal deficit is narrowing. Do not create an image of an internal crisis; we face external shocks which we are managing. Let us collectively address them without fear.

¶ 12 Thank you.