New government backs China’s $1.4 billion proposal after favorable environmental report

Sri Lanka’s new government has approved China’s $1.4 billion port project in the island nation’s capital, marking a swift U-turn following warnings it might scrap the venture.

The decision was announced late on Thursday after China sent a special envoy to Colombo for talks with the new administration.

Many observers believe the Sri Lankan government is shifting from its predecessor’s “China-first” foreign policy to improving ties with India and the United States.

Sri Lankan government spokesman Rajitha Senaratne said on Thursday the Cabinet approved the Colombo Port City project following a favorable environmental impact assessment.

Chinese Foreign Ministry spokesman Hong Lei said on Friday that cooperation between China and Sri Lanka benefits both countries.

The first phase of the single-largest investment project in Sri Lanka was inaugurated during President Xi Jinping’s visit to the country in September.

This phase includes the construction of hotels, high-rise buildings, recreational facilities, a shopping complex, golf course and Formula 1 motor racing track.

The second phase will include Sri Lanka’s first 100-floor skyscraper.

China sees the Colombo port project as a key shipping hub designed to boost transcontinental links.

The new Sri Lankan administration under President Maithripala Sirisena decided to re-evaluate all major projects launched by the previous government under concessionary loans, including the port project.

Its approval came on the day that Chinese Assistant Foreign Minister Liu Jianchao arrived in Colombo.

The Chinese Foreign Ministry said Liu noted the benefits that Colombo Port and Hambantota Port, in southern Sri Lanka, would bring to local people by raising their standard of living.

He made the comments when meeting Sri Lankan Foreign Minister Mangala Samaraweera, who will reportedly visit Beijing later this month.

“China believes the new Sri Lankan government will honor the bilateral friendship and ensure that cooperation projects will not be influenced by the domestic political situation,” Liu said.

Samaraweera, hailing China as an “all-weather friend” of Sri Lanka, expressed the new government’s willingness to establish all-around contacts with Beijing.

“We welcome China to invest in and offer assistance to Sri Lanka,” he said.

Sun Shihai, director of the Chinese Association for South Asian Studies, said, “The harbor city project, which has great development potential, is in line with Sri Lanka’s national interests.”

Suggestions that it might be scrapped were due to the recent election in Sri Lanka and pressure from other countries concerned about Beijing’s growing influence in the region, Sun said.