Daily Mirror (Sri Lanka)

Sri Lanka agrees port deals with China amid political chaos

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„Signs 2 contracts with Chinese

firms worth over US$ 50mn „Sri Lanka owes around US $ 8bn to China

(Colombo) REUTERS: Sri Lanka signed two multi-million dollar contracts with Chinese firms for a port upgrade project yesterday in the middle of a political hiatus that has raised doubts over the legitimacy of the government and the legality of the deals.

The debt-saddled island has long been a target of Beijing’s ambitious Belt and Road infrastruc­ture scheme to connect China with countries cross Asia and beyond, while regional power India has also been vying for deals to counter China’s influence.

But a political crisis triggered by President Maithripal­a Sirisena’s replacemen­t of Prime Minister Ranil Wickremesi­nghe with Mahinda Rajapaksa, who was in turn sacked by parliament, has raised doubts over who can legitimate­ly make decisions in the country.

Foreign countries have yet to recognise the new government and Wickremesi­nghe’s party has said any decisions by Rajapaksa’s cabinet are illegal.

An official at the staterun Sri Lanka Ports Authority (SLPA) told Reuters it signed two contracts with Chinese firms worth over US$50 million yesterday after the deals were approved by Rajapaksa’s disputed Cabinet last week. One of Rajapaksa’s cabinet ministers, speaking on condition of anonymity, also confirmed the deals had been approved by the cabinet, while documents seen by Reuters showed the deals were set to be rubber-stamped at the meeting.

The contracts include a US$ 32 million project to enhance the deep berth capacity of state-run Jaya Container Terminal (JCT) in Colombo with China Harbour Engineerin­g Company, and another one worth US$ 25.7 million for the purchase of three cranes from JCT Shanghai Zhenhua Heavy Industries Co. Ltd for the same project, according to the ports authority official.

Asked about the deals, the former Cabinet spokespers­on under Wickremesi­nghe’s government, Rajitha Senaratne, told Reuters: “We will have to re-examine definitely. They don’t have the legal power to decide.”

The ports authority official said the tenders for the deals had been advertised in state-owned newspapers, as is the norm in Sri Lanka, and that they were sent to a cabinet-appointmen­t procuremen­t panel months ago.

India, which accounts for around 80 percent of Colombo’s trans-shipment business, has raised concerns over increasing Chinese projects in Colombo.

New Delhi had been pushing Sri Lanka for the award of an estimated US$ 1 billion contract for a second foreign-operated container terminal in Colombo.

But that deal was the subject of an argument between Sirisena and Wickremesi­nghe just before his ouster, in which Sirisena reportedly said the country couldn’t give any more of its assets to foreigners.

The political instabilit­y and economic malaise have raised questions over Sri Lanka’s ability to service large external debt taken to finance reconstruc­tion following the end the civil war in 2009. It owes around US $8 billion to China, including state linked firms and banks, official data shows.

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