China has pledged over $1 billion in new grant money to Sri Lanka after a Chinese luxury real estate project in the capital Colombo was suspended, Cabinet Spokesman and Health Minister Dr. Rajitha Senaratna said.
Chinese companies building a road in a Colombo suburb have also agreed to cut the cost of the $520 million project by 30 billion rupees ($225.73 million), said the Minister, reporting on the results of President Maithripala Sirisena's visit to Beijing last week.
President Maithripala Sirisena traveled to China just weeks after his government halted a $1.4 billion port city project that had been inaugurated by Chinese President Xi Jinping during a visit in September. He cited a lack of government approvals.
The Cabinet Spokesman said the Chinese delegation offered the new grants without any conditions on the fate of the port city project.
"Xi Jinping and his officials did not mention anything about the port city during the discussion," Mr. Senaratne told reporters.
"But President Sirisena explained that it will be looked into after considering the issues related to environment, legal, land ownership, and national and regional security."
Under the port city plan, 108 hectares of land next to the main commercial port of Colombo would be taken over by China Communications Construction Co Ltd, including 20 hectares on an outright basis and the rest on a 99-year lease, reported Reuters.