The Sri Lankan government on Tuesday announced that the promoter of the $1.4-billion Colombo Port City project has agreed to withdraw all compensation claims for losses incurred due to the suspension of the project.
Though it did not mention the amount claimed earlier, the promoter, CHEC Port City Colombo Pvt. Ltd , a firm fully owned by China Communications Construction Company, had said at the time of suspension of the project in early 2015 that there would be an “initial direct loss” of over $380,000 per day. Based on this estimate, the media had reported that the amount of compensation claimed was $125 million. A release issued by the Sri Lanka government on Tuesday stated that the project was suspended because the previous administration of the Sri Lanka Ports Authority failed to obtain environmental permits.
Approving various amendments to an agreement signed by the government with the promoter in September 2014, the Cabinet attributed the withdrawal of the claims to “the goodwill created by the visits” of President Maithripala Sirisena (in March 2015) and Prime Minister Ranil Wickremesinghe (in April 2016) to China. The Cabinet has also cleared the proposal to establish a financial city as part of the project.
The promoter would provide Sri Lankan Rs.500 million towards a programme of fishermen’s income support which would be implemented by the Ministry of Megapolis and Western Development in consultation with the Ministry of Fisheries and Aquatic Resources Development. A fresh agreement would be signed by the Ministry of Megapolis and Western Development, Urban Development Authority and the project promoter, replacing the 2014 agreement, the release added.
