Lanka suspends China port city project

Colombo, Mar 5: The Sri Lankan government on Thursday temporarily suspended work on the construction of a controversial USD 1.5 billion Chinese port city project here.

"The cabinet has decided to temporarily suspend with immediate effect the work in the port city project. The cabinet sub-committee on the project has not approved it," Cabinet spokesman Rajith Senaratne said.

The decision to suspend the project even temporarily has spared new President Maithripala Sirisena's government from embarrassment.

In the run up to the January presidential election, Sirisena's rival, former president Mahinda Rajapaksa was the subject of opposition criticism over the project. The new government alleged that the real estate deal with China was signed without cabinet approval and without following procedures, and hinted at corruption.

The development was to include shopping malls, water sports, golf, hotels, apartments and marinas.

The Colombo Port City project is seen as the single largest private sector development ever in the country. The project, expected to play a key role in China's ambitious 'Maritime Silk Road' project in India's backyard, is being seen as the single largest private sector development ever in the island.

In September last year, Chinese President Xi Jinping had inaugurated the construction of the project, part of China's attempt to restore its ancient prestige and historical links along the maritime route through Southeast and South Asia.

Rajapaksa signed the deal with China to reclaim sea to build a port city of 233 hectares which environmentalists said would cause severe harm to the entire southwestern coastline of the island.

Today's decision came after many conflicting statements by the new government on the project. Having originally said the project would go ahead as planned, the government later put off a final decision. It was being reviewed as the government was unwilling to annul an agreement signed with the Chinese, Prime Minister Ranil Wickremesinghe had said.

PTI