War of words between Chinese firm and Sri Lanka escalates over Colombo Port City

The war of words over the stalled Colombo Port City project escalated yesterday as China Communications Construction Company (CCCC) called the Sri Lankan government’s recent statement on the matter “factually incorrect”.

Finance Minister Ravi Karunanayake had told the South China Morning Poston Friday that CCCC had failed to furnish the necessary documents within the two-week deadline set for it by the government.

The new government in Colombo that came to power in January put Port City, a giant real estate reclamation project off the capital, on hold earlier this month alleging irregularities. The government, which maintains CCCC had not obtained the requisite clearance to start the project, gave it two weeks to show all necessary documents to prove otherwise.

“CCCC, upon being issued the temporary suspension of the project via a letter on March 6, 2015 by the Government of Sri Lanka, reiterates that it responded within two working days with all relevant approvals and permits afforded to the Project Company,” the company said in a statement to thePost yesterday.

“They run full-page advertisements in newspapers justifying their actions, but when we tell them to submit documents, they draw a blank,” Karunanayake had said in his interview.

CCCC, upon being issued the temporary suspension of the project via a letter on March 6, 2015 by the Government of Sri Lanka, reiterates that it responded within two working days with all relevant approvals and permits afforded to the Project Company
CCC STATEMENT

The company reiterated that according to its agreement with the previous government, “the obligation to obtain the necessary permits and approvals for the project is with the Sri Lankan Government and not the Project Company”.

CCCC also maintained that the “agreement was authorised by Sri Lanka’s Attorney General and approved by the Cabinet of Sri Lanka”, contradicting the new government’s stand.

Colombo Port City has become a bone of contention between China and Sri Lanka. In his meeting with the new Sri Lankan President, Maithripala Sirisena, in Beijing last week, President Xi Jingping urged him to protect the legitimate interests of Chinese companies. Xinhua reported that Sirisena had said the current situation is “temporary and the problems do not lie with China”.

Colombo Port City is among the several Chinese-funded projects that have come under the scrutiny of the new government, which alleges large-scale corruption by the previous administration of pro-China Mahinda Rajapaksa, who was ousted in the presidential elections in January.

But unlike most projects by Chinese companies in the South Asian country, Colombo Port City is not bankrolled by Chinese loans. It is financed entirely by equity from CCCC or funds raised through it, with no commitment from the Sri Lankan government. Under the deal for the project, CCCC would reclaim 233 hectares of land. Of this, it would keep 108 hectares

Meanwhile, shrugging off the controversy over Chinese projects and companies operating in Sri Lanka, China Merchants Holdings (International) yesterday said it will make Sri Lanka one of its regional headquarters.

The subsidiary of state conglomerate China Merchants Group is the largest shareholder of Colombo International Container Terminals (CICT), its joint venture with the Sri Lanka Ports Authority (SLPA).

The company has built the Colombo South Container Terminal in the capital under a 35 year build-operate-transfer agreement with the SLPA.

Sri Lanka is an important trade and shipping hub for the Indian subcontinent, and some of its staff there had been relocated to the firm’s other overseas offices “because of the excellent work they had done in building and operating this port”, managing director Hu Jianhua said. He added that CICT was the firm’s first overseas greenfield project and a testing ground for its global aspirations.

The terminal, opened in April last year, handled 0.68 million 20-foot standard containers as of the end of last year. The volume is projected to exceed 1 million this year.

CMHI reported its net profit for last year rose 14.7 per cent to HK$4.6 billion, beating analysts’ estimates.

CCCC’s net profit for last year also unexpectedly rose 11.3 per cent to 14 billion yuan.

Share this:

Comments 1

  1. Profile photo of Kappiya
    Kappiya

    Don’t you think the Chinese firms administration is trying to cover something up? Specially the new compalint by SL sub-contractors not being paid and the Chinese directer being called by the court is not good for the Port City.
    The SL side should ask the Chinese side to take action and probe things from their side or the Port City will be never go forward if the current situation continues

Leave a Reply

Your email address will not be published. Required fields are marked *