Sri Lanka to give land to China to compensate for reclamation project suspension
ECONOMYNEXT – Sri Lanka is to give China two extra hectares of land in a sea reclamation that will expand the capital Colombo, as compensation for temporarily suspending the project by a new administration that was elected in January 2015.
Cabinet spokesman Rajitha Senaratne said, the Chinese firm has agreed not to seek cash compensation for the delay.
CHEC Port City, a Chinese state firm incorporated in Sri Lanka is to spend 1.4 billion US dollars to reclaim 269 hectares of sea adjacent to Colombo’s main port.
The bulk of the buildable land is to go the project company according to previous reports. Sri Lanka is to keep 62 hectares.
The new administration planned to cancel a night racing project and re-allocate two hectares to China and use 28 hectares to increase the area for parks by 28 acres. The completed reclaimed city will have 45 hectares of parks and 13 hectares of artificial beach.
China will be given all land on a 99-year lease and 20 hectares originally agreed to be given by the ousted Rajapaksa regime on a free hold basis has been offered on a lease.
Sri Lanka’s new administration want to build a Colombo International Financial Centre, which will be geographically mid-way between Singapore and Dubai.
But Sri Lanka is trying to build financial centre without reforming the central bank, which has a tendency to print money and depreciate the currency, claiming to make exports competitive by destroying real salaries of the working population and in the process driving large number of workers to the Middle East to make ends meet.
Singapore has a modified currency board and the UAE monetary authority faithfully mimics the rate movements of the Fed to maintain its peg.