Last Updated : 2019-07-20 15:12:00

SL reverses $300mn China housing deal ahead of PM's India visit

19 October 2018 09:30 am - 5     - {{hitsCtrl.values.hits}}

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Sri Lanka has reversed a decision to award a $300-million housing deal to China in favour of a joint venture with an Indian company, the government said, ahead of a visit by the prime minister to its South Asian neighbour. 

Prime Minister Ranil Wickremesinghe will meet his counterpart Narendra Modi on Saturday in New Delhi, the Indian capital, for talks. The two countries have long-standing ties, partly because of cultural and ethnic links with Tamils, many of whom live in the island's north and east. 

In April, state-run China Railway Beijing Engineering Group Co Ltd won a tender worth more than $300 million to build 40,000 houses in Jaffna in Sri Lanka's north, with China's Exim bank to provide funding. 
But the project was halted after residents demanded brick houses, saying they preferred their traditional type of dwelling instead of the concrete structures the Chinese firm had planned. 

On Wednesday, government spokesman Rajitha Senaratne said the cabinet had approved a new proposal for 28,000 houses worth 35.8 billion rupees ($210 million) to be built by Indian firm ND Enterprises and two Sri Lankan firms in the north and east. 

The planned homes are part of a total requirement of 65,000, he added. 

“The rest of the houses will be given to firms which are ready to build them at lower prices,” Senaratne told reporters in Colombo, the Sri Lankan capital, adding that China could also be considered in future for the remaining housing projects. 

In Beijing on Thursday, foreign ministry spokesman Lu Kang told a regular news briefing China's cooperation with Sri Lanka was derived from consultations on an equal footing and he hoped that cooperation would be viewed objectively. 

Critics have said a big Chinese port project and related infrastructure in Sri Lanka's south have been dragging the country of 21 million people deep into debt. 

India has built 44,000 houses in the country's north in the first phase of reconstruction after a 26-year-war with Tamil Tiger rebels, and plans to rebuild Palaly airport and Kankesanthurai harbour, both heavily damaged in the conflict. 

But in recent years, China has swept in, building ports, power plants and highways as part of Beijing's String of Pearls strategy to build a network of friendly ports across Asia. 

India has long considered Sri Lanka, just off its southern coast, as within its sphere of influence and sought to push back against China's expanding maritime presence. (Reuters)

  Comments - 5

  • BT Friday, 19 October 2018 09:59 AM

    It is shocking and beyond the pale. At this very time when investigations are going on of a plot by the Indian Intelligence RAW to kill our President and former defence secretary,the Prime Minister is reversing an earlier decision and offering a big building contract to India. No,this dangerous introvert Prime Minister has many questions to answer.

    Dam Friday, 19 October 2018 03:20 PM

    What are you talking. Have you read the news clearly ... and anyway it was Presidents planted drama. Whatever investment in SL has to balance rather than leaning too much to one side

    Rohan Friday, 19 October 2018 05:50 PM

    Dam, if you think it is normal for any Prime Minister to act in this way at this particular time then you must have lost your marbles.

    Silva Friday, 19 October 2018 03:22 PM

    Even Venezuela was smart enough to drop the dollar for international transactions in favor of the euro instead of the Chinese Yuan. Venezuela also said “we will not accept being anyone's colony.” They are taking the Chinese colonization plan seriously unlike Sri Lanka. Countries like Senegal and Djibouti are already too deep in the trap.

    RR Friday, 19 October 2018 05:59 PM

    Await the news that MS reverses the decisiin again


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