China's CCCC said on Tuesday it had approval to restart the construction of its $1.4 billion real estate project near Colombo's port that was suspended a year ago on the orders of the Sri Lankan government.
Sri Lanka's cabinet last week granted approval for China Communication
Construction Company (CCCC) to resume the biggest foreign direct investment project in the country after suspending it in March last year.
The project includes apartments, shopping malls, a water sports area, a golf course, hotels and marinas next to Colombo's main port which India uses
as a main transhipment port.
"With the resumption of work now approved, the project company will commence with preparatory work as soon as feasible to ensure that the project can be completed in the expected time frame," CHEC Port City Colombo (Pvt) Ltd, which handles the project for CCCC, said in a statement.
It said the suspension had resulted in significant losses. CCCC had estimated in March last year that the shutdown would result in losses of more than $380,000 a day.
The Sri Lankan government has conducted additional environmental impact assessments to understand the project's impact and to study mitigation measures, the company said.
When President Maithripala Sirisena's government suspended the project, it cited various irregularities including a lack of proper permits and approvals.
India had raised concerns over CCCC taking ownership of 20 hectares of land under an earlier agreement.
However, the government said later it would only give any land to the Chinese company on a 99-year lease.
A cabinet paper submitted by Prime Minister Ranil Wickremesinghe last week said there were some issues still to be resolved including the lease, total extent of reclaimed land, and compensation due to the suspension.
The original deal involved 269 hectares of land being reclaimed, including 108 hectares assigned to the Chinese investor, of which 20 hectares was granted on a freehold basis.
The government, however, wants to reduce the land area allocated to the project to reduce the environmental impact.
(Reporting by Shihar Aneez and Ranga Sirilal)