CHINA will spend $1 billion (£735,664 million) in the construction of three 60-storey buildings at a mega project near Sri Lanka’s main port, Colombo said on Tuesday (2), as Beijing aims to boost its influence in the Indian Ocean.
The deal follows an earlier Chinese investment of $1.4bn (£1.03bn) to carry out reclamation work for the wider Colombo International Financial City development, strategically located next to Sri Lanka’s harbour, the only deep sea container port in the region.
The countries hope the project, initiated by former Sri Lankan president Mahinda Rajapaksa, will create a financial centre in the Indian Ocean comparable with those in Singapore and Europe, drawing billions in foreign investment and thousands of jobs.
“China Harbour (company) will put in $1 billion to build three buildings,” Sri Lanka’s urban development minister Champika Ranawaka told reporters in the capital.
“These three 60-storey buildings will be able to attract more foreign companies into Sri Lanka.”
Sri Lankan prime minister Ranil Wickremesinghe visited the site on Tuesday. “We will shortly have legislation to turn this area into a financial centre like in Europe or Singapore,” he said.
The controversial project was formally launched after a visit to Colombo by Chinese president Xi Jinping in 2014, but work was suspended by the new administration, which came to power in January the following year.
It resumed after the state-owned China Communications Construction Company (CCCC) entered into a fresh agreement with the new government in August 2016, despite concerns from India.
Colombo is a key hub for Indian import-export cargo. Beijing has been accused of seeking to develop facilities around the Indian Ocean in a “string of pearls” strategy to counter the rise of India and secure its own economic interests.
After protests by New Delhi, Colombo removed freehold rights granted to the Chinese company and offered the land on a 99-year lease instead.
The CCCC has said it expects the project to create 83,000 new jobs and help Sri Lanka attract another $13bn (£9.56bn) in direct foreign investment to develop infrastructure.