While the new National Unity Government has taken highly professional diplomatic steps to improve ties with India and the United States, the European Union and other countries, the relationship with China, though not anything like a cold war, appears to be on thin ice.

The deposed Rajapaksa regime, especially during the past five years, has taken arbitrary decisions within the family circle on major national, bilateral and international issues. As a result the country is facing difficult consequences. One of such issues where decisions were taken and binding agreements signed without proper consultation and consensus is the highly controversial US dollars 1.5 billion Colombo Port City Project funded by China.

During the presidential election campaign the then Opposition Leader Ranil Wickremesinghe promised that the Colombo Port City Project would be reviewed.
Prime Minister Wickremesinghe told Parliament on Wednesday that  the luxury real estate deal with China was signed without cabinet approval and without following procedures and said the government had launched a new investigation to uncover any corruption. 

 He said the Rajapaksa regime entered into the deal with China to build an offshore development project on reclaimed land next to the Colombo port. Sri Lanka’s big and most important neighbour India has opposed part of the agreement that would give ownership to 20 hectares of land on a freehold basis to a Chinese state-owned company, next to Colombo port which primarily serves India for trans-shipment. When he was the leader of the opposition, Mr. Wickremesinghe had strongly criticised the project saying it was a secret deal between the Rajapaksa family while cabinet approval was not obtained and parliament was not given any details despite repeated appeals. Mr. Wickremesinghe said when his United National Party came to office it would scrap the project. The Premier told Parliament on Wednesday two high level committees would investigate the deal after the results of an initial investigation showed irregularities, but that the new government had yet not decided to stop the project. “If there was anything against the law while signing the agreement, if there has been any corruption, if there are any conditions detrimental to the country, we will take necessary action,” Mr. Wickremesinghe said. 

 China, the emerging economic giant not only in Asia but in the world, is known to be keen to ensure the safety of its investments in Sri Lanka. Insiders in Colombo and Beijing say China’s Assistant Foreign Minister Liu Jianchao who came here as a special envoy this month had indirectly warned that if the Port City Project was arbitrarily cancelled or if major changes were made, China would reconsider investments in Sri Lanka. Foreign Minister Mangala Samaraweera whose visits to India, the US and the EU have helped to restore strained relationships with those countries, is scheduled to visit China on February 24. President Sirisena is also expected to visit China by the end of next month and it is hoped that some changes could be made in the Port city agreement to ensure there were no harmful environmental, economic or moral effects on Sri Lanka. 

 The port city is planned on 233 hectares (one hectare is 2.47 acres) of reclaimed land in Colombo. Under the proposed deal, 108 hectares would be taken over by China Communications Construction Company, including 20 hectares on an outright basis and the rest on a 99-year lease. The development would include shopping malls, water sports, golf links, formula-1 racing tracks, hotels, apartments and marinas. The Reuters news agency quoted a Chinese embassy official in Colombo as saying, China acknowledged the Sri Lanka government’s decision to investigate. “But it is an obligation of a democratic government to respect an international bilateral agreement reached with another country by the previous government,” the official said.

China’s leaders are claiming they are cracking down on corruption by Chinese politicians or officials and we hope China will respect Sri Lanka’s sovereign right to crack down on any mega corruptions in this Port City deal.