Sri Lanka’s parliament passed a bill Thursday (May 20) to establish an economic body to oversee a high-end property development project by the Chinese Communist Party on Sri Lanka’s waterfront.
Sri Lankan workers work at the site of the Communist Party-developed Port City in Colombo. (Feb. 24, 2020)
The name of the body is the Colombo Port City Economic Council. The motion, submitted by the Sri Lankan government, was passed by an overwhelming majority of 149 to 58 votes. The Sri Lankan Parliament has a total of 225 members.
The Chinese development project is under the China Port Engineering Company Colombo Port City, a subsidiary of China Communications Construction Group, with a total investment of US$1.4 billion. The project’s mission is to build a high-end urban complex in the heart of Colombo by reclaiming land, including a resort, amusement park, convention center, marina, residential development, financial district and a suite of green space facilities. China says this is a key cooperation project between China and Sri Lanka under the Belt and Road Initiative.
In exchange, China will receive a 99-year lease of 62 hectares of commercial land from the Sri Lankan government.
After being hit hard by the New Crown epidemic, the Sri Lankan government urgently needs foreign investment to blood the country’s economy, and therefore sees the Port City project as a lifeline to save the economy. Sri Lankan Prime Minister Mahinda Rajapaksa had said in the parliamentary debate that the port city would bring huge jobs and foreign investment.
But there are many in both Sri Lanka and India who are concerned about the Chinese project, believing it could be turned into a de facto Chinese military base or colony.
Over the past decade, China has provided a large number of loans for various projects in Sri Lanka, such as seaports, airports, roads, power plants and port cities. These loans have increased the country’s debt burden.
The Sri Lankan government had to “lease” the deep-water port of Hambantota to China for 99 years in 2017 due to its inability to repay the Chinese loans.
Sri Lanka’s Supreme Court had previously held that the bill was in conflict with the country’s constitution and recommended that certain provisions of the bill be put to a referendum in order to make it law. Another recommendation by the Supreme Court was that other provisions would not require a referendum, but would need to be approved by a two-thirds majority of Parliament. The government could amend the bill to comply with the Constitution.
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