Chinese firms are involved in almost 40% of construction projects in Sri Lanka according to an industry body there, which is pressing for all projects to have a Sri Lankan partner.
The Ceylon Institute of Builders (CIoB) made the claim last week (29 June), adding that Chinese firms want a 70% share of the island nation’s construction market, reports Colombo Gazette.
CioB has asked the government to stipulate Sri Lankan participation in all projects, and has signed a memorandum of understanding with a Chinese trade association, China International Contractors Association (CHINCA), on project sharing.
"In the next three years CHINCA wants to increase their stake in the Sri Lankan construction industry to 70% of total projects. This can be detrimental to our local firms," said CioB president Dr Rohan Karunarathna.
"As a result, the Construction Chamber of Sri Lanka has signed an MoU with CHINCA to share all their projects here with Lankan construction firms so that the risk is mitigated. We have also moved a cabinet paper-all such projects by foreign firms from any country should have a Sri Lankan partner from now on," he said.
Chinese companies entered the country on the back of big loans from Beijing for controversial infrastructure schemes under the government of former President Mahinda Rajapaksa.
These included the expansive, $1.5bn Hambantota Port on the southern coast, funded and built by China, which was completed in 2010 but has barely been used.
Struggling to repay its debt for the port, which is strategically important for China, the Sri Lankan government last year signed it over to a Chinese partially state-owned port company for 99 years.
Another example is the $1.4bn Colombo Port City scheme, a harbour and commercial development funded and built by Chinese entities, which the new government of President Maithripala Sirisena tried unsuccessfully to stop throughout 2015.
Sri Lanka is now struggling under a record-high debt pile inflated by foreign loans.
Image: Artist’s render of the $1.4bn Colombo Port City development, funded and built by Chinese entities (CHEC Port City Colombo Pvt Ltd)
