Loosening Beijing’s embrace

Loosening Beijing’s embrace, Sri Lanka reviews China projects

Sri Lanka’s new government will review Chinese infrastructure projects awarded under the previous administration, a junior minister said, a move bound to please Indian and Western powers concerned about Beijing’s access in the island state.

On Friday, the government said it would review a US$1.5 billion port deal with China Communication Construction Co over concerns about the company getting land on a freehold basis in a high-security zone.

That port project had been of particular concern for India, the destination for the majority of the transshipment cargo through Colombo. India was furious with the last government after it had allowed a submarine to dock there twice.

Harsha De Silva, deputy minister for Policy Planning and Economic Affairs, said on Saturday that President Maithripala Sirisena’s government would look at benchmarks for Chinese infrastructure costs using independent audit firms.

“We will certainly do that because we want to show the people the true cost of these projects as well as what they are paying for these projects,” De Silva said. He said the government would consider legal action against people involved in over-priced projects.

Former President Mahinda Rajapaksa, who was unseated on January 8, heavily depended on China for infrastructure in the wake of a devastating civil war. He has borrowed over US$6 billion for mega projects since the end of a 26-year conflict in May 2009. Sri Lanka has a US$76 billion economy.

A USD 500 million Chinese-built port opened in Sri Lanka in 2013, giving Beijing a vital foothold on the world’s busiest international shipping lane. Photo: AFP

Opponents during the election campaign last month said many of the projects financed with Chinese loans were over-priced, an allegation that helped Sirisena to victory.

De Silva said China had already started to discuss the issues “at the highest level of the government” and the new government would work on a project by project basis. A Chinese embassy official in Colombo, however, said all the projects implemented had parliament approvals.

“The new government can review the projects, but it has no right to stop any project already implemented.

“If it goes before international law, the government will have to lose and pay all the debts, the official said.

Rajapaksa’s opponents and some independent economists have said some of the projects have given very low returns on investment, including a US$277 million airport in Rajapaksa’s home constituency of Hambantota.

“President Rajapakse’s regime tried to play China against India and India against China and … came a cropper,” Sri Lanka’s new prime minister, Ranil Wickremasinghe, told India’s NDTV news channel in Colombo on Saturday.

The country’s new foreign minister, Mangala Samaraweera, met his Indian counterpart in New Delhi yesterday in a visit that “reflects our priorities”.

Rajapakse fell out with several countries, including India, that accused him of turning a blind eye to the large-scale human rights abuses as he had refused to cooperate with the UN-mandated investigation into the killing of Tamil civilians during the country’s civil war.

Reuters, Agence France-Presse

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