The Sri Lankan Government will renegotiate with its Chinese counterparts a demand for compensation for the delay in granting approval for the continuation of the Colombo Port City project.  The Chinese company has demanded US$ 125 million or permission to reclaim additional land in lieu of the delay of the project by more than a [...]

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Port City: Govt. wants compromise on compensation claim over delay

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The Sri Lankan Government will renegotiate with its Chinese counterparts a demand for compensation for the delay in granting approval for the continuation of the Colombo Port City project.  The Chinese company has demanded US$ 125 million or permission to reclaim additional land in lieu of the delay of the project by more than a year, Megapolis and Western Development Minister Champika Ranawaka told the Sunday Times. The Ministry of Megapolis is the project proponent.

Mr. Ranawaka said the issue of compensation or additional land area would be taken up during Prime Minister Ranil Wickremesinghe’s visit to China from April 6. The project is expected to be on top of the agenda during the China-Sri Lanka talks.
The company, CHEC Port City Colombo (Pvt) Ltd, which is handling the project for the Chinese investor, China
Communications Construction Co Ltd (CCCC), has made the demand after the project was put on hold by the new Government after it took over in January last year.

Mr Ranawaka said a ‘concession agreement’ was due to be finalised before Mr. Wickremesinghe travelled to China, but further time had been sought to reach agreement on a range of issues, including compensation.  After renegotiations, the proposals would be placed before the Cabinet before any new agreement was signed.

He said one of the renegotiated terms would focus on the reclaimed land of 263 hectares. The land would be given on a 99-year lease agreement instead of a ‘freehold’ system. Initially the Environmental Impact Assessment was prepared only for an extent of 200 hectares.

The minister said some of the areas to be scrapped under the new agreement would be the space for casinos and tracks for car races.  Megapolis Ministry Secretary Nihal Rupasinghe said the Government would point out that at the initial stages of the project the Environmental Impact Assessment (EIA) had been violated.

He said 72 new conditions had been laid down in the permit now issued by the Coast Conservation and Coastal Resources Management Department and the Chinese company had agreed to them. He said once the project gets underway a special traffic plan will be put in place in the Fort area.

The agreement for the project, costing US$ 1.5 billion, the largest private investment ever, was inaugurated by Chinese President Xi Jinping on September 17, 2014. The land reclaiming process is expected to take three years and construction thereafter. It is estimated to create at least 80,000 jobs.

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