China and Sri Lanka signed seven agreements on Thursday amid reported negotiations over compensation of $125 million demanded by a Chinese company for the temporary suspension of the Colombo Port City (CPC) project.
The seven agreements included one on extradition and another on cooperation between the China Development Bank and the Central Bank of Sri Lanka.
Work on the $1.5 billion CPC project, China’s biggest foreign investment venture, resumed last month. On Thursday, a Chinese official said both countries are determined to push the project forward after it was suspended for nearly a year by President Maithripala Sirisena’s government.
“On the Colombo port, both sides agreed to further speed up the overall and comprehensive resumption of work on this project. The announcement to resume the work has been made by the Sri Lankan side but now we will go into further technical details,” Xiao Qian, the foreign ministry’s Asia department chief, told reporters.
“This is an important project and both countries have a strong desire to further enhance and advance this project,” Xiao said after visiting Prime Minister Ranil Wickremesinghe met Premier Li Keqiang.
No official comment was made here but a Sri Lankan minister said in Colombo on Wednesday that the country was not in a position to reimburse the losses of the China Communications Construction Company for the project’s suspension.
The Sri Lankan side has promised to protect the rights and interests of Chinese companies and to foster a sound environment for Chinese investors.
The two countries had agreed to prioritise the construction of an industrial park at Hambanthota in Sri Lanka’s deep south, where China has already built a port and an airport.
“China will encourage its competitive companies to make investments in Sri Lanka and step up cooperation with Sri Lanka in industrial park, in the processing and manufacturing sectors and in (increasing) production capacity,” Xiao said.