President Maithripala Sirisena's government in March had temporarily suspended the project launched by the previous Mahinda Rajapaksa regime in partnership with China in September last year.
Sri Lanka on Saturday said that the Chinese-funded Colombo Port City project will go ahead but the companies will not get any free-hold land for the controversial US $1.4 billion project.
"We are looking at the environment impact assessment report and the project will go ahead. But there will be no free hold of lands there," Prime Minister Ranil Wickremesinghe told parliament. Wickremesinghe also said the formula one racing track will not be constructed in the project aims to build 233 acres of reclaimed land adjoining the port of Colombo.
President Maithripala Sirisena's government in March had temporarily suspended the project launched by the previous Mahinda Rajapaksa regime in partnership with China in September last year.
The government had suspended the project saying that it was reviewing the award of the project to China Communications Construction Co (CCCC) Ltd over the allegations that the previous administration breached local laws and sidestepped environmental requirements for the deal.
It had asked the Chinese project company to agree to a change in provision of freehold land into leasehold land to enable the project to resume. The government's main spokesman had told media on December 17 that it has agreed to restart Chinese-funded projects worth billions of dollars which were suspended following allegations of corruption.
"We tried to renegotiate these contracts with the Chinese, but it was not very successful. We have now decided to go ahead with the projects. It is not feasible to abandon them half-way through," spokesman Rajitha Senaratne, who is also the health minister, had told reporters.
Wickremesighe's UNP in opposition criticised the project as a sell out to the Chinese. China had secured contracts to build highways, railroads and ports during the Rajapakse regime and had also emerged the largest single lender to Sri Lanka which had relied heavily on Beijing for both economic and political support.
The new government has complained that it was paying too much interest on Chinese loans funding much of the development.
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