The ambitious Port City Colombo project stands at a defining crossroads marked by rising investor confidence and visible commercial traction, yet shadowed by structural delays, cost overruns, and lingering inefficiencies that continue to cloud its promise as Sri Lanka’s premier urban development.
While international interest has been steadily climbing, recent audit reports have laid bare significant gaps between the project’s aspirations and on-ground progress. Official data for the first nine months of 2025 reveal encouraging signs of market activity, but the city’s physical backbone remains incomplete, tempering optimism with caution.
By May 2025, nearly 80 percent of the leasable space at the Port City Business Centre had been taken up by “Authorised Persons,” underscoring robust commercial demand. In the same month, Sweden-based IGT 1 Lanka signed a landmark lease for two office towers expected to accommodate over 500 employees a sign that genuine operational activity is beginning to take hold within the Special Economic Zone (SEZ). According to Finance Ministry sources, more than 100 companies were preparing to commence operations in the zone by October 2024, signalling a gradual shift from development to execution.
China Harbour Engineering Company (CHEC), a subsidiary of the state-owned China Communications Construction Company and the project’s principal foreign developer, continues to play a pivotal role. A government gazette issued in July 2025 announced that IFC Colombo 1 Pvt Ltd, a CHEC subsidiary, would inject approximately US$142.7 million into new real estate ventures within the Port City — a reaffirmation of China’s sustained confidence in the project’s long-term commercial potential despite administrative hurdles.
However, the Auditor-General’s report for the 2023 financial year, released in October 2024, paints a less flattering picture. By September 2023, only 85 of 118 land plots (72%) had obtained completion certificates, though the original target was 2019. Landscaping work due by March 2020 was just 77 percent finished by late 2023, and essential road, bridge, and tunnel infrastructure lagged at around half completion.
The report also highlighted worrying financial inefficiencies. A temporary sewage treatment facility initially budgeted at Rs. 1 billion ballooned to Rs. 3.7 billion — losses attributed to procurement lapses and poor oversight.
Acknowledging these setbacks, the government in February 2025 extended the Port City Project Management Unit’s mandate until June 2027, effectively confirming a longer timeline for completion. Meanwhile, mid-2025 regulatory revisions tightened eligibility for “strategic businesses” within the SEZ, emphasizing genuine high-value investment.
Despite these challenges, officials insist investor enthusiasm remains strong, with global firms signing long-term leases and governance frameworks increasingly aligned with international norms. Whether Port City Colombo can overcome its infrastructure backlog while sustaining investor faith will ultimately decide if it fulfills its ambition of becoming a world-class regional financial hub — or remains a work in progress suspended between promise and delivery.
