Lanka softens stance on China-backed port project

BL11COLOMBO_2505376fSri Lanka is offering a compromise that could allow a major Chinese-backed real estate project to restart after months of delays, Finance Minister Ravi Karunanayake told Reuters.

The minister’s comments come a week before a parliamentary election in which the ruling party has an edge over an Opposition led by Mahinda Rajapaksa. The China-friendly ex-president, who was ousted in January, is attempting a comeback.

The $1.4 billion Colombo port city project was suspended by President Maithripala Sirisena’s new government in March because it was found not to have the proper permits and approvals.

The project, emblematic of China’s strategy of developing a maritime Silk Road from Asia to Europe, has alarmed Sri Lanka’s larger neighbour India which sees it as a threat in its backyard and has been sympathetic to Sirisena’s reformist rule.

One stumbling block has been the planned acquisition by Chinese developers of 20 hectares of freehold land for the waterfront project, which lies a stone’s throw from the business district of Sri Lanka’s largest city.

Karunanayake said the government was in the process of renegotiating the deal that would, if it wins the election, “help bring in a final understanding that will help bring a win-win situation”.

“Freehold will certainly be changed into a mutually holding type of a situation, so that there is no person that will control land in another country,” he said. “You don’t need to have a company holding national lands for perpetuity.”

Since coming to power at the start of the year, the Sirisena administration has suspended most foreign-backed infrastructure projects that, it says, were overpriced and financed on onerous terms harmful to Sri Lanka’s national interests.

Work on two Chinese-funded highway projects has started recently without major changes, a signal that Sirisena’s government would, if re-elected, seek to revive other schemes as long as a compromise can be reached on cost.

The port city project is funded by China Communications Construction Co Ltd (CCCC) and locally handled by CHEC Port City Colombo (Pvt) Ltd.

The project to build apartments, shopping malls, a water sports area, a golf course, hotels and marinas is now a fenced-off tract of boulders dumped by what used to be a sandy beach. When work was suspended, CCCC estimated the shutdown would cause losses of more than $3,80,000 a day.

The project would give the Chinese company 108 hectares of land in the form of payment, 20 hectares of it outright and the rest on a 99-year lease.

2 COMMENTS

  1. Everybody knows that China is now a rich country and everybody knows that Sri Lanka is very poor. Sri Lanka’s national debt is about 7400 billion rupees or probably more. If Sri Lanka ever hopes to pay off its debts and achieve a surplus to develop its economy it must cut its expenses in a great way. Everybody can understand that. One way to make a much needed profit is to run its own port/container facilities, open to business for all countries. To allow China to build and operate its own port facilities is a dead loss for Sri Lanka’s future and certainly not in its long-term interest. Mind you, the CCCC is not a private company, it is clearly an adjunct of the Chinese state. Does Shri Lanka wish to become a pawn in China’s global strategic ambitions? What about developing a perfectly fine natural harbor that is already there: Trincomalee? With the right investments Sri Lanka could operate it independently at a fine profit, say for container handling. China wants a Chinese suburb in Sri Lanka for Chinese workers. For whom do you think are these apartments, hotels, golf course and watersports area intended? I think for Chinese employees who will operate the projected marinas. Renegotiate? If you love your people and country, better scrap the whole insane plan forthwith!

  2. Then why these Yahapalana thugs were crying in last January election that Rajapaksa is wrong. This Underground criminal Ravi is a cheat and should be sent home on August 17th.

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