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Sri Lanka clears the decks for port city project

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portcitySri Lankan government has cleared the decks for the controversial Colombo Port City project to resume, Finance Minister has told the South China Morning Post. Executives at the related Chinese companies who cannot be identified separately told the Post that the project was expected to restart around February, after all the final details had been worked out. “We have given all the necessary clearances. Now it is up to the investors to sort out the minor details,” said Ravi Karunanayake.

“On our part, the government is happy with the environmental impact assessment [EIA] report for the project. It is now under public consultation.”

The absence of a proper EIA was cited as a major reason for pulling the US$1.4 billion project – which will see a spanking new business district the size of Monaco rise from the ocean – that was cleared by former China-friendly president Mahinda Rajapaksa. Colombo Port City is among the several big-ticket Chinese-backed infrastructure ventures put on hold after Rajapaksa lost in January’s election. Inaugurated by President Xi Jinping in September and financed by state-controlled and Hong Kong-listed China Communications Construction Co (CCCC) and executed by its subsidiary CHEC Port City Colombo, the project has driven a wedge between Beijing and Colombo,

once one among China’s strongest allies in the region. Karunanayake said the government had asked the Chinese project company to agree to a change in provision of freehold land into leasehold land to enable the project to resume. “This is in accordance with the law of the land. Foreigners can’t own land in this country and everyone has to abide by it,” the minister said. Under the original agreement, CCCC would reclaim 233 hectares off Colombo coast. It would keep 108 hectares, including 20 hectares on a freehold basis and the rest on a 99-year lease. Sri Lanka would own the rights to the other 125 hectares. Apart from potential environmental damage ranging from coastal erosion to loss of marine life, this provision of giving freehold land to a Chinese state company became a political hot potato at home and abroad.