A Chinese company building the stalled $1.4bn Colombo Port City development in Sri Lanka has demanded $125m in compensation from the Sri Lankan government for delaying the project for more than a year.
On the Colombo port, both sides agreed to further speed up the overall and comprehensive resumption of work on this project– Xiao Qian, head of the Chinese Foreign Ministry’s Asia department
CHEC Port City Colombo (Pvt) Ltd, which is handling the project for the Chinese investor, China Communications Construction Co Ltd (CCCC), made the demand saying the suspension of work had cost the company an estimated $380,000 a day.
"The Project Company has a legal right for compensation by the Government for losses suffered due to the suspension," the company told newspaper The Nation, adding that the cost of the scheme was being met entirely by CCCC – 30% by equity and 70% through the value of the land.
Built on reclaimed land, the city scheme (pictured) is Sri Lanka’s single biggest foreign investment project, and includes apartments, shopping malls and marinas. Early last year work was suspended for review by the new government of president Maithripala Sirisena, who had promised in his election campaign to reduce the country’s reliance on China.
The Sri Lankan government has said it would negotiate with Chinese counterparts over the demand for compensation.
Meeting in Beijing this week the prime ministers of both countries expressed determination to press on with the project, but made no mention of the compensation issue, Reuters reports.
"On the Colombo port, both sides agreed to further speed up the overall and comprehensive resumption of work on this project," Xiao Qian, head of the Chinese Foreign Ministry’s Asia department, told reporters following a meeting between Sri Lankan Prime Minister Ranil Wickremesinghe and Chinese Premier Li Keqiang.
"The announcement to resume the work has been made by the Sri Lankan side but now we will go into further technical details," Xiao added, according to Reuters.
Image: Artist’s render of the $1.4bn port city scheme planned for Colombo