By, P.K.Balachandran Courtesy NewsIn.Asia

Colombo, October 11: Sri Lankan President Ranil Wikremesinghe’s  visit to China, which is to begin on October 15, is expected to bring in Chinese investments to the Colombo Port City, which has been awaiting both domestic and foreign investment for long.

According to Dr.Palitha Kohona, who returned to Sri Lanka upon completion of his term as Ambassador to China, two major Chinese companies, the China Harbour Engineering Company, which built the Colombo Port City, and the Hunan Construction Engineering Group Co., Ltd.,  are likely to invest more than US$ 1 billion in the Colombo Port City. China will also construct the Central Highway through Kandy.

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Agreements for these are likely to be signed during Wickremesinghe’s visit, Kohona said. .

On the restructuring of Sri Lanka’s debt to China, Dr.Kohana said that he would not know the details, but the EXIM Bank of China may have worked out a way to help Sri Lanka. He ruled out China agreeing to take a haircut.

The haircut is not China’s way,” Kohona said. China would like Sri Lanka to put its financial house in order by taking a number of steps including prudence. If that is not done, Sri Lanka will have to keep asking its creditors to take a haircut again and again,” he said.  

It was reported that China had proposed a postponement of the repayment of the existing debt, an additional loan and a buyer’s credit also. It had also advised Sri Lanka to facilitate Chinese investment instead of seeking loans.

China might set an example by beginning to invest in the Port City and in the hinterland of the Hambantota port.

The Chinese oil company Sinopec recently invested in the fuel distribution business in Sri Lanka.

On Sri Lanka’s debt to China, Dr.Kohona said that it could not be seen as trap as major infrastructure projects could not be expected to yield revenue immediately. They open up opportunities for new economic activities and that will gradually generate income for the people.

This is the rationale for developing countries to sign up with the BRI for infrastructure projects like roads, railways and ports, he said.

BRI Forum

While in China, Lankan President Wickremesinghe will address the Third Belt and Road Forum to be held on October 17 and 18 to mark the 10th anniversary of the Belt and Road Initiative (BRI) championed by Chinese President Xi Jinping.

Representatives from many developing countries, notably from Latin America and Africa, are expected to attend the forum.

Wickremesinghe’s decision to attend the BRI is a clear sign of Sri Lanka’s endorsement of the BRI, a project which is the brainchild of President Xi. The latter will be quite pleased with the Lankan President’s move as Western governments describe the BRI as an instrument to trap poor countries in huge debts.   

Reuters reported that Russian President Vladimir Putin will attend the forum.

In a message to Xi this month, Putin said their talks would deepen Russian-Chinese ties for the benefit of our friendly peoples, in interests of ensuring security and stability on the Eurasian continent and throughout the world

The BRI is a plan for global infrastructure and energy networks that China launched a decade ago to connect Asia with Africa and Europe through land and maritime routes. China had signed Belt and Road cooperation documents with more than 150 countries and more than 30 international organizations, the Chinese foreign ministry said.