Sunday, April 6, 2014

Bust the Chinese plot – Mega bucks at stake – Port City here we come!

So what brings the Chinese here to Sri Lanka, to put in a bid for the Port City? Unsolicited, but a carrot that seems to the GOSL too good to be true.

A 99 yr lease, at a minimal price and as part of the 250 hectare landfill development the GOSL will be given about 50 hectares at no extra charge! With land, filling and construction they expect it to cost US$1.3B. We in SL have NO idea what their game plan is or how it is going to work. We have given them free reign.  Many who fear it say that it will lead to a property crash in Colombo with all this excess land available for sale and 10,000 plus apartments into Colombo.

Well here goes, as at a minimum of US$500,000 per apartment, they will pre - sell it to the Chinese for US$5B. A quick way to make a cool US$3.5B with eyes closed.

See link for the logic as it is a no brainer.

The question now really becomes, whether the terms were fair or if we were sold down the tubes for our ignorance at the games the Chinese now play.

In fact the profit could be a lot more. With offices and such like the gain on sales greater, so I am merely noting a minimum return to the investor for that risk, in a deal our GOSL negotiators thought was “too good to be true.” How wrong can they be?

The risk is that China will go belly up before they are sold, and even if that were the case, the investors will wish to take their money out, so what is wrong in investing in a property on the SL waterfront, in a tropical paradise one flight away from the unbearably smog laden Beijing. At worst they can escape to the sunny climes of Sri Lanka, who will then play host to this city of Chinamen.

This dovetails neatly with my previous blog entry, on the Chinese invasion, that we are not sufficiently smart in cashing in on

So lift up the Champagne glasses to yet another Chinese coup at our expense!    


Anonymous said...

of all of the projects, this one seems to be the best deal for the sri lankan people. a $1 billion investment made for the price of a tiny share of land for the developer. they won't have to do much to get their money back, as the land will be prime property in colombo, and will appreciate on its own with minimal investment requirement. prices of land in colombo are already unreasonable and the working man cannot afford property in colombo as-is, so a bit of depreciation will be good for the working class in Colombo. of course, as the new land is developed into premium property with malls, wide boulevards, apartments, schools, etc. the price of that land will become the most premium as it will actually be within a planned community in colombo with a much higher quality of life as a result. when the time is right, they will just sell it off as it will be in the middle of a mini-metropolis and they'll make a tidy profit. this is not the right chinese project to use as an example to try and stoke nationalistic sentiment among the locals.

Anonymous said...

obviously anon has NOT read the article. He is talking the old talk.

This is a very different take!

Anonymous said...

Pre selling out of a brochure to Chinese clients (inveterate gamblers who see this as a sure bet!) so the money is made up front, even before the project is complete.

What a great business proposition!

Only the Chinese could pull it off. The Sri Lankans are made to look like real idiots! At least hope they produce their own power and desalinate sea water within the project, otherwise we will be even subsidising our electricity too them, let them use our precious water at low cost.

The only beneficiaries I see are the fixers who brought the project to the cabinet table.

Anonymous said...

Why bother with casinos when foreign investors can hit the jackpot so easily in such schemes?

Anonymous said...

the first comment was the most insightful. the rest are just hyperbole. it is usually the case the developers sell projects off of the plan, some with disasterous consequences. krish project being a recent disaster (INDIANS). that's why i believe the govt is requiring developers to put 100% down prior to beginning the project so that they can be sure it is not a white elephant.

but this chinese port city is a different kettle of fish. the developer is only getting a small portion of the land, and let them do what they want with it. THEY ARE CREATING THE LAND OUT OF NOTHING and so the country loses little by this investment as nobody is displaced and nothing is physically destroyed. as mentioned, it will be a well-planned community with wide boulevards, scenic avenues, malls, apartments, homes, offices, parks, etc. in a nicely ordered environment. which colombo-ite would not want to live in such a development?