Sri Lanka has backed China’s surprise initiative to make India an important component of a regional cooperation to address New Delhi’s concerns over Chinese involvement in large-scale projects in the country, the Press Trust of India reported yesterday.
Finance Minister Ravi Karunanayake said Chinese President Xi Jinping surprised his Sri Lankan counterpart Maithripala Sirisena during their recent meeting with the proposal.
“Xi said why don’t we get India to work with us, which was seized upon by President Sirisena, who said that would be the best possible outcome. Both presidents agreed that India should be part of the equation,” Karunanayake told Hong Kong-based South China Morning Post.
Chinese officials said as part of China-India cooperation in South Asian, Beijing is holding discussions with New Delhi.
After the defeat of former Sri Lankan president Mahinda Rajapaksa in January polls, China mooted the trilateral cooperation among the three countries.
India is apprehensive about the China-backed Maritime Silk Road (MSR) initiative, and its implications for India’s security.
It is also sensitive to China’s growing engagement in its neighbourhood, especially after two Chinese submarines were allowed to dock in Colombo last year by Rajapaksa.
Karunanayake, who was part of the Sri Lankan delegation to China, said the Chinese company involved in the controversial USD 1.5-billion Colombo Port City project has failed to produce necessary documents to run it within the two-week deadline set by the new government.
He said the state-owned China Communications Construction Co (CCCC) did not have the requisite clearances, such as environmental licence, from the government.
“They run full-page advertisements in newspapers justifying their actions, but when we tell them to submit documents, they draw a blank,” Karunanayake said.
President Sirisena’s new government suspended the 233-hectare land-reclamation project this month alleging large-scale irregularities.
Karunanayake said: “We are telling Chinese companies that we are keen to have clean, transparent accountable investment. Port City should not be the benchmark. There are serious problems with that project that we are trying to fix. It has nothing to do with our attitude to Chinese investment.”
Sri Lanka is also reviewing other Chinese projects, he said.
He said his government is renegotiating the billions of dollars Sri Lanka borrowed from China to fund infrastructure projects.
The Sirisena government is struggling with debts it has inherited, which now stands at 88.9 per cent of the GDP, compared with 78.3 per cent in 2013.
“The people should not be made to pay for sins of the past government. We have urged the Chinese to look at the loans compassionately,” the minister said, refusing to divulge the status of debt negotiations with Beijing.
Karunanayake said the government is also reexamining Lotus Tower, funded by China Exim Bank.
The USD 103 million tower — 26 metres taller than the Eiffel Tower and the tallest in South Asia — is being built by China National Electronics Import and Export Corporation and Aerospace Long-March International Trade.
“There was over investment and we are examining if it can be done cheaper,” he said.