Sri Lanka suspends controversial Chinese port city project

The Dollar Business Bureau The current Sri Lankan government has decided to temporarily suspend the construction of the controversial US $ 1.5 billion Chinese port city project citing that the real estate deal with China was signed without cabinet approval, without following procedures and is a corrupt project by the erstwhile Rajapaksha regime. However, the growing co-operation between the Narendra Modi government and the newly elected Maithripala Sirisena’s Lankan government is also looked upon as one of the major reasons why the island nation is not going ahead with the project. Mid-February, India and Sri Lanka on Monday discussed economic cooperation, maritime security and bilateral investments, besides other aspects of bilateral relations and international issues for a more balanced growth in trade between the two countries. The Government of India expressed its readiness for furthering India’s investments in Sri Lanka and improved air connectivity to foster tourism ties with the island nation. Besides these, the Civil Nuclear Cooperation Agreement between the two nations has drawn the special attention and this was the first such agreement the island nation had made. A nuclear agreement was also on the cards for stronger cooperation in agriculture and healthcare sector along with a Memorandum of Understanding for stronger trade in the agricultural sector, defence and security cooperation, which is expected to play a strategic role in the South Asia region. Referring to its assistance towards the construction projects in Sri Lanka like housing, under which it has already constructed more than 27,000 houses, the Indian side also expressed its commitment to Sri Lanka in furthering its assistance in the infrastructure sector. It is believed that India also sought clarity from Sri Lanka over the China-funded Colombo port city project, which was considered by India as a security threat to New Delhi and it could be one of the reasons why the present Sri Lankan government has stopped the project for now. Earlier in January, Colombo has asked India to help Sri Lanka set up a Finance Intelligence Unit in the island nation. This FIU being setup by India is expected to aid Sri Lanka in tracing billions allegedly stashed overseas by the erstwhile Rajapaksha regime.   

This article was published on March 05, 2015.