Lanka grants approval to China for USD 1.4 bln port city

Ahead of Prime Minister Ranil Wickremesinghe's visit to China next month, Sri Lanka today gave the go-ahead to the country for the controversy-hit USD 1.4 billion Colombo port city project that was suspended by President Maithripala Sirisena over environmental concerns.
The Sri Lankan Cabinet approved the extension of the agreement on the Port City project for six months.
"The Cabinet Committee on Economic Management has recommended allowing resumption of the project subject to limitations and conditions stipulated in the EIA (environmental impact assessment)," the government said in a statement.
The USD 1.4 billion project was suspended in February 2015 by the new government of President Sirisena based on environmental concerns.

The government then sought an environmental impact report.
The Cabinet sub-committee recommended the resumption of the project subject to conditions in the environmental impact report, it was announced today.

Cabinet clearance was granted shortly after International Trade and Strategic Development Minister Malik Samarawickreme visited China and held talks with the Chinese authorities on a host of bilateral matters including the Port City Project.
The much awaited and long over due Colombo Port City project will recommence this month, Samarawickreme said.
He was speaking at the opening session of the Ceylon Chamber of Commerce organised business conclave here.
The Minister said they have now received the Environmental Report (EIA) which had made some recommendations to the Port City model plan which was accepted.

Samarawickreme said that land lease for 99 years will stay.
"After the land is filled the Port City project will be operated as a joint venture between the governments of China and Sri Lanka," he was quoted as saying by the Daily News.
Samarawickreme said the Chinese government is also looking at allocating 1,000 acres in Hambantota to open a special investment and industrial zone for the Chinese.
The port project was aimed at reclaiming land from the sea and building a city with apartments and leisure facilities adjoining the Colombo sea port.
A pet project of the former president Mahinda Rajapaksa administration, it was dubbed as extravagant and corrupt by the then opposition coalition.

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The Prime Minister said that cash-strapped Sri Lanka will bring legal reforms to encourage foreign investment, as the country seeks to convert the massive USD 8 billion debt it owed to China into equity for infrastructure investment.
Wickremesinghe said streamlined regulations and a free trade agreement would be in place to increase economic ties with China.
He said that he was hoping to unveil an economic master plan with a regulatory framework by June.
He said the Chinese would be offered equity stakes in loss-making projects -- a second international airport and a deep sea port in the island's south -- commissioned by former strongman president Mahinda Rajapakse.

"We are setting aside an area of 1,000 acres as a special investment zone for Chinese companies to set up operations in Hambantota," the prime minister said.