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Sri Lanka relents, China gets okay to resume Colombo Port City work
THE Chinese consortium, CHEC Port City Colombo (Pvt) Ltd, has welcomed the decision of recently elected Sri Lankan government to allow work to resume on the US$1.4 billion project.
President Maithripala Sirisena had suspended the project a year ago, shortly after he took office following a campaign in which he questioned China's role in Sri Lanka, reported Bloomberg News.
Hong Kong's China Merchants has a 35-year, $500 million build, operate and transfer contract with the port authority and holds a 85 per cent in the venture with the port authority holding the remaining 15 per cent.
Now Sri Lanka has unblocked the surrounding port city project, a sign of thawing ties weeks before Prime Minister Ranil Wickremesinghe travels to Beijing.
CHEC Port City "regrets that the suspension and the lengthy process taken to resume work have resulted in significant losses" to the company and Sri Lanka, it said in a statement.
The company will look to complete the project "in the expected timeframe," it said.
President Sirisena, who shifted Sri Lanka closer to India, is now looking to rebuild relations with China as a ballooning fiscal deficit and depleted reserves force the government to seek external help.
Sri Lanka is looking for a loan of as much as US$1.5 billion from the International Monetary Fund, said central bank Governor Arjuna Mahendran.
In September 2014, Chinese President Xi Jinping inaugurated construction of the Colombo Port City, which was being built by a unit of state-controlled China Communications Construction Co on a site bigger than Monaco.
President Maithripala Sirisena had suspended the project a year ago, shortly after he took office following a campaign in which he questioned China's role in Sri Lanka, reported Bloomberg News.
Hong Kong's China Merchants has a 35-year, $500 million build, operate and transfer contract with the port authority and holds a 85 per cent in the venture with the port authority holding the remaining 15 per cent.
Now Sri Lanka has unblocked the surrounding port city project, a sign of thawing ties weeks before Prime Minister Ranil Wickremesinghe travels to Beijing.
CHEC Port City "regrets that the suspension and the lengthy process taken to resume work have resulted in significant losses" to the company and Sri Lanka, it said in a statement.
The company will look to complete the project "in the expected timeframe," it said.
President Sirisena, who shifted Sri Lanka closer to India, is now looking to rebuild relations with China as a ballooning fiscal deficit and depleted reserves force the government to seek external help.
Sri Lanka is looking for a loan of as much as US$1.5 billion from the International Monetary Fund, said central bank Governor Arjuna Mahendran.
In September 2014, Chinese President Xi Jinping inaugurated construction of the Colombo Port City, which was being built by a unit of state-controlled China Communications Construction Co on a site bigger than Monaco.
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