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!