High Level Chinese visit may have put Colombo Port City real estate reclamation project worth US$1.4 billion back on track
Sri Lanka’s Port City project could be back on track after a significant move by China when it dispatched a special envoy to Sri Lanka, where major Chinese investments are being reviewed since a Beijing-friendly president was ousted from power in January and a recent parliamentary election reinstated a national unity government seeking a more neutral foreign policy.
Chinese president Xi Jinping had previously attended the port city groundbreaking ceremony back in September last year but the government of Sirisena, who had campaigned on a promise to loosen ties with China, suspended the project after taking office in January, after defeating former President Mahinda Rajapaksa at the presidential election on January 08, the new government suspended the project until a proper evaluation could be carried out.
President Maithripala Sirisena assured Chinese President Xi Jinping, when he met him in March, that the suspension of the project was only a temporary measure. The Sirisena administration had previously ordered a review of the USD 1.4 bn project over allegations of wrongdoing.
China pumped billions of dollars into infrastructure projects in Sri Lanka during the corruption-tainted presidency of Mahinda Rajapaksa. The new government alleges these projects were contracted out on unequal terms favouring Chinese companies. Nearly 70 per cent of the infrastructure projects in the country in the past six years have been funded by China and built by Chinese companies.
However, in what could be a potentially positive outcome for the development of the Colombo Port City, the Sri lankan government has decided to appoint a committee to review the contract which the previous regime entered into with China Communications Construction Company Ltd.
According to the Island Government Spokesman Rajitha Senaratne Addressed the weekly post-cabinet press briefing last week at the Government Information Department, saying that the Cabinet had approved the proposal submitted by Ports and Shipping Minister Arjuna Ranatunga to appoint a review committee, and that the proposed committee would include the senior officials headed by the Secretary to the Prime Minister to review and make recommendations to the Ministerial Committee on Economic Management.
Minister Senaratne said the Cabinet had already approved the agreement for six months and the new committee would be appointed to evaluate the problems which had already arisen.
It has been claimed that the country would lose nearly 100,000 job opportunities if the project was to be abandoned.