Colombo Port City faces fresh scrutiny over dollar salaries, recruitment secrecy, tax changes, and corporate influence inside its governance model.
Colombo Port City is no longer being viewed merely as Sri Lanka’s futuristic land reclamation project, but as a separate governance zone operating outside the country’s familiar legal, administrative, and economic framework.
Introduced as a future turning point in Sri Lanka’s economic body, the project has now become the centre of a deeper debate over power, transparency, corporate dominance, and the privileges created under the Colombo Port City Economic Commission Act No. 11 of 2021.
The extensive self-governing authority granted to the Port City Commission, its dollar-linked salary structures, and the powerful business interests believed to be operating behind the scenes have triggered serious public discussion.
This analysis examines the financial administration of the Port City Commission, employee privileges, and the forces shaping its upper levels of decision-making.
A Governance Bubble Outside the State System
Management Services Circulars that apply to Sri Lanka’s general state sector and semi-state sector do not apply to the administration of the Port City.
The Commission appointed by the President has been legally granted wide authority to determine the service conditions, salaries, and allowances of its employees, including the Director General.
The most serious consequence of these broad powers was highlighted to Parliament by the State Auditor General himself.
By the end of 2023, the institution did not have an officially approved Scheme of Recruitment, or SOR, nor an approved cadre.
For an institution expected to manage billions in foreign investment to operate from its beginning without a formal human resources structure, while recruiting staff through management discretion, raises serious questions about good governance.
Although attempts are now being made to correct this with support from external human resources experts, the damage to the institution’s transparency record has already been created from the start.
Dollar Salaries and the State Sector Divide
Employment within the Port City is divided into two main streams. One is the direct staff of the Commission. The other is employees of “Authorized Persons” established within the Port City region.
For the second category, a completely different dollarized salary framework has been introduced under Section 35 of the Act.
While an entry-level professional in Sri Lanka’s general state service receives a basic salary of around Rs. 30,000 to Rs. 40,000 per month, an ordinary local professional working within the Port City is expected to earn more than US$ 1,000 per month, or over Rs. 300,000.
This creates a massive gap of approximately eight to ten times the salary of the ordinary state sector.
However, these salaries are not paid through public taxes or directly from the Treasury.
The Commission pays its staff from income generated through internal regulations and service fees under the Commission Fund, while employees of business institutions are paid by the respective investment companies.
Yet, when details of the personal salaries of the Commission’s top officials were requested under the Right to Information Act, the refusal to release that information on the grounds of privacy and confidentiality suggested the existence of further concealed financial zones inside the institution.
Corporate Shadows Inside the Regulator
Any serious reading of transparency within the Port City Commission must examine the composition of its Board of Directors and their external business relationships.
The current Chairman of the Commission is President’s Counsel Harsha Amarasekara.
Harsha Amarasekara is also a significant figure in the business empire of Dhammika Perera, one of the most powerful businessmen in Sri Lanka.
He serves as a Board member and Chairman of several leading companies linked to Dhammika Perera, including Vallibel One and Royal Ceramics.
The presence of a direct representative of one of the country’s most powerful oligarchic business networks at the top of a regulatory institution controlling Sri Lanka’s largest foreign investment and economic zone raises a serious conflict of interest question.
Whether this is merely coincidental or part of a broader strategy to reshape the state mechanism according to the interests of corporate capital is a matter that requires deeper public and institutional scrutiny.
2026 Tax Changes and Lost Competitiveness
The Port City, despite being detached from ordinary government regulations in many ways, has now had to bow to the strict conditions of the International Monetary Fund.
One of its most attractive features, the full exemption from personal income tax through PAYE and APIT relief, has been removed through new amendments presented to Parliament in 2026.
Under the revised framework, existing employees will become subject to standard domestic tax rates after a three-year transitional period.
New recruits will receive no tax relief from the time of hiring, meaning their salaries will be fully subject to domestic tax rules.
With this major reversal, the Port City has lost its strongest trump card in competing directly with low-tax financial centres such as Dubai and Singapore.
To attract internationally skilled professionals in the future, investors may now be forced to significantly increase basic salaries to compensate for the loss of tax benefits.
At first glance, the Colombo Port City Economic Commission appears to be a fast-moving, dollar-based mechanism detached from the slow bureaucracy of Sri Lanka’s traditional state service.
However, the absence of formal recruitment procedures, secrecy surrounding salary structures, and the visible influence of powerful business hands within the governance regime all suggest a deeper risk.
That risk is that the Port City may not simply become a paradise for foreign investors, but the newest fortress consolidating the power of the local capitalist class.
It is now increasingly clear that the changes many people expected when the current government came to power have not materialized, and that the Port City, like many other areas of national governance, is being maintained in the same old manner.
With tax relief now under challenge and international competitiveness at stake, Sri Lanka must watch carefully how the Port City will position itself in the years ahead.
