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Sri Lanka passes a controversial bill to retract China-funded Port city

  The Sri Lankan Parliament passed a controversial Bill on laws governing the China-backed Colombo Port city, with a majority of 149 legislators – in the 225-member House – voted in its favour. The Bill declares 269 hectares of reclaimed land annexed to Colombo as the country's first Special Economic Zone (SEZ) for service-oriented industries.

The China Harbour Engineering Company (CHEC), a unit of China Communications Construction Company, has invested $1.4 billion for reclamation of land and construction of infrastructure adjacent to the Colombo Port City.

It was launched in 2014 during the previous term of the Rajapaksa government when Chinese President Xi Jinping visited the island nation.
In return, it obtained the right to use 62 hectares (153 acres) of commercial land on a 99-year lease from the Sri Lankan government.

The planned project includes an integrated resort and casino and conference centre zone, a marina, residential developments, a financial zone and green spaces. International media have often termed the project as China's 'Debt-Trap' policy.

The port is symbolic to the controversy dogging Chinese President Xi Jinping's Belt and Road initiative from Kenya to Myanmar, including accusations that the world's second-largest economy is luring developing countries into debt traps.

In Sri Lanka, where the transaction to lease the port was opposed by Rajapaksa's party, the present Prime Minister, Mahinda Rajapaksha took Chinese loans during his 10-year rule as president to build the project in his home district.

"The Hambantota Port is not a debt trap," Rajapaksa asserted. It is a ‘commercially viable project’ and is ‘transforming Sri Lanka's overall port infrastructure.’

Sri Lanka's new government, led by President Gotabaya Rajapaksa, wants to undo the previous regime's move to lease the southern port of Hambantota to a Chinese venture, citing national interest. Former Prime Minister, Ranil Wickremesinghe in 2017 changed the terms, saying it would be difficult to pay the loans taken to build the project. He agreed to lease the port for 99 years to a venture led by China Merchants Port Holdings Co. in return for $1.1 billion.

Colombo's relationship with Beijing began to deepen towards the end of Sri Lanka's nearly 30-year civil war and then expanded in the post-war infrastructure building spree. While India provided military training and non-offensive military assets, China, Pakistan and Russia supplied weapons commercially. While environmentalists and fisher folk opposed the move, the mega infrastructure project is currently being built on land reclaimed alongside Colombo's iconic seafront.

Diplomatic tensions between India and China are escalating and many neighbouring nations are feeling the heat. Sri Lankan President, Gotabaya Rajapaksa has pledged to balance diplomatic ties between India and China while defending Chinese infrastructure projects in the country.

While addressing Nikkei's Future of Asia conference, Gotabaya said, "We are aware of the world power rivalry and regional power dynamics, but our foreign policy is to remain neutral.” He emphasized that they will not jeopardize Indian security and added at the same time, ties with China will continue.

China's projects in Sri Lanka have raised significant concerns in India as the port is close to the Indian southern coastline and Beijing could use it for military purposes.

China has often rejected India's concerns and said it was a mutually beneficial deal that would aid Sri Lanka's economy. Even Colombo has repeatedly assured New Delhi that it will not compromise Indian security and the port would only be used for commercial purposes.



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