Deadlock broken on port project

Chinese President Xi Jinping (2nd R) and his wife Peng Liyuan (1st R) pose for a group photo with Sri Lankan President Maithripala Sirisena (2nd L) and his wife during a welcoming ceremony in Beijing, capital of China, March 26, 2015. (Photo/Xinhua)

China and Sri Lanka agree to put suspended $1.4b Colombo infrastructure plan back on track

China and Sri Lanka have ended a stalemate over a $1.4 billion port project in the island nation's capital of Colombo — the biggest Chinese investment project in the country.

The development sees Beijing recovering their ties amid Colombo's policy shift after a leadership reshuffle.

During meetings with Chinese leaders in Beijing on Thursday, Sri Lankan President Maithripala Sirisena promised to continue the infrastructure project, which was suspended by the country's new administration.

President Xi Jinping said China has always seen Sri Lanka as holding an "important diplomatic position in the region", while Premier Li Keqiang called for "consistency and stability of policies" in Sri Lanka.

Sirisena, who visited India soon after taking office in January, is making his first trip to China.

He said Sri Lanka appreciates China's continued support for the Colombo port project as well as other Chinese investment, adding that his government will take more effective measures to promote cooperation with China.

Problems surrounding construction of the port project are "temporary and do not lie with the Chinese side", he said.

China, which is sinking millions of dollars into Sri Lanka's infrastructure, is the island's biggest investor.

The new Sri Lankan government has ordered a review of the Colombo port project following allegations of wrongdoing that arose since Sirisena took office in January.

The suspension triggered concerns from China, which said the project was in line with local laws. Media reports said the commercial losses caused by the suspension could be as high as $380,000 a day.

During Thursday's talks, Xi pledged to expand bilateral trade and industrial cooperation with easier funding from the Beijing-led Silk Road Fund and the Asian Infrastructure Investment Bank.

The two financial institutions are committed to funding economic development in countries along the New Silk Road Economic Belt and the 21st Century Maritime Silk Road.