Chinese company working on Colombo port project incurs massive losses after suspension
The Chinese company executing the port city project in Colombo has incurred massive losses after the new Lankan government suspended it following issues of transparency.world Updated: Mar 12, 2015 20:43 IST
The Chinese company executing the port city project in Colombo has incurred massive losses after the new Lankan government suspended it following issues of transparency.
The company reiterated that it had followed all stipulated norms before beginning construction last year.
The a ambitious project started during the regime of former President Mahinda Rajapaksa was being implemented by the China Communications Construction Company (CCCC), a subsidiary of the China Harbour Engineering Company.
But the project ran into trouble after the new government under President Maithripala Sirisena came to power in January. Questions were raised about the environmental impact the project could have and, after some conflicting reports about the fate of the project, work on it was stopped.
The project, which is the largest foreign direct investment to the island, caught much attention with the Sri Lankan government reassessing the environmental impact and land ownership issues by the Chinese company, state media said.
The suspension, as it turned out, has left the CCCC with huge losses, the company said in a statement.
"As a result of this suspension, CCCC estimates an initial direct loss for the company of over 380,000 U.S. dollars per day. Furthermore, the interest on the financial loan obtained by the company for the development of the project is being paid, regardless of the ongoing suspension," the company said in a statement.
“Over 200 meters of the breakwater constructed so far, has been damaged due to the suspension, as the company is unable to take measures to protect the reclaimed land because of the suspension,” the state media reported, quoting the statement.
The company said the suspension also puts into question the fate of those, mostly Sri Lankans, working on it.
"The project employs approximately 1,000 direct personnel and a further 4,000 indirect employees, of which almost all are Sri Lankans and the sustainability of this workforce is also a concern for the company during this period," the company added.
China’s new ambassador to Sri Lanka Yi Xianliang said on Wednesday that Beijing was “willing to continue as a trustworthy and reliable partner of Sri Lanka and its people. No matter how the situation changes, the two sides should cherish the long standing bilateral friendship, and unswervingly stick to warm bilateral relations, advancement of bilateral mutually beneficial cooperation, as well as mutual support on international and regional affairs”.