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Sri Lanka to investigate second major Chinese project

16 March 2015 | By Rod Sweet | 0 Comments

Another high-profile Chinese-sponsored project in Sri Lanka is to come under review, following the suspension of the $1.5bn Colombo Port City scheme.

The government will now review the 350-m-high communications tower, known as the Lotus Tower (pictured), in Colombo, now under construction.

Sri Lanka’s shipping and aviation minister Arjuna Ranatunga told reporters yesterday that the Chinese-funded tower was being built on land owned by the Sri Lanka Ports Authority (SLPA) and that there were no documents to prove that land had been acquired for the project.

The move will strain relations between the two countries, as China signed a number of development deals under Sri Lanka’s previous government, led by President Mahendra Rajapaksa, who lost elections in January. The new government, led by Maithripala Sirisena, is taking a tough stance against Chinese-backed projects.

The new government has also launched a probe into alleged corruption under the Rajapaksa regime. 

Not just anybody’s land

Yesterday the minister, Arjuna Ranatunga, said that the Lotus Tower is being built on land owned by the Sri Lanka Ports Authority (SLPA) without proper procedures having been followed.

“The former SLPA chairman and the then subject minister should be responsible for this discrepancy. This is not just anybody’s land. It is SLPA land and there is a procedure that must be followed,” the minister said, local media reported

“We will ensure that lands belonging to the SLPA will remain with the Authority and the income generated through projects on these lands or by the SLPA will be for the Authority,” he said. 

The landmark tower, which its builders claimed will be the tallest free-standing tower in South Asia when complete, is being built on three hectares of land in central Colombo.

Chinese firms China National Electronics Import and Export Corporation (CEIEC) and Aerospace Long-March International Trade Co. (ALIT) signed a contract to build it in January 2012. According to local media, the $104m tower was being financed by China’s EXIM Bank. 

CCCC summoned

Meanwhile, the Chinese company building the Port City Project project – China Communications Construction Company Limited (CCCC) – has been summoned to appear before the special ‘Port City Investigation Committee’ next week, according to local reports.

The committee has directed CCCC to furnish all documentation issued by the government related to the project, which is around 13% complete.

The Sri Lankan project manager of the scheme, Chandana Gunawardena told local media that due to the suspension of construction, around 250m of the breakwater had washed away and CCCC was losing about  $37,500 a day, including rent on three ships that had been hired for construction.