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Chinese firm faces action for not halting Sri Lanka project
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SRI Lanka could take legal action against a Chinese company for not halting work on a US$1.5 billion luxury real estate project until a probe is completed, a government minister said.
Sri Lanka’s new government is reviewing the award of the project to China Communications Construction Co (CCCC) because of allegations the previous administration breached laws and sidestepped environmental rules for the deal.
The project, which risks getting involved in a diplomatic row, involves development of a port city on reclaimed land in the capital Colombo, complete with shopping malls, a water sports area, golf course, hotels, apartments and marinas.
Sri Lanka’s Investment Promotion Minister Kabeer Hashim said the Board of Investment had asked the Chinese company last month to halt the project until the investigation was completed.
However, the port city construction had actually been accelerated since the new government came in.
“The ministry of ports will take necessary action to halt the work until this inquiry is done,” Hashim said.
If it was not stopped, he said, “then legal action will be instituted against them to not proceed any further.”
Chinese foreign ministry spokeswoman Hua Chunying said China understood and respected the desire of Sri Lanka’s new government to improve the investment environment.
“We believe that Sri Lanka will take into account the overall picture of friendly bilateral ties and the basic interests of Sri Lanka’s national development to appropriately resolve the relevant issue to maintain the confidence of Chinese companies investing in Sri Lanka,” she said yesterday.
An official in CCCC’s investor relations department said the firm was not aware of the minister’s latest remarks.
“The government has made some suggestions during its review but there has been no mention of canceling the project,” said the Beijing-based official, who declined to be identified, citing company policy.
China has said the port city and another port under development in southern Sri Lanka were good for the country as tens of thousands of jobs would be created and millions of dollars of foreign direct investment would come in.
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