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Sri Lanka approves Chinese port project

[COLOMBO] Sri Lanka's new government on Thursday gave the green light for China's US$1.4-billion port project in the capital despite warning while in opposition that it would scrap the controversial venture.

Government spokesman Rajitha Senaratne said the cabinet had approved the Colombo Port City project, under construction alongside an existing giant Chinese-built container terminal, in what is the island nation's largest single foreign investment.

Prime Minister Ranil Wickremesinghe vowed during last month's election to halt the project, branding it "haphazard" and damaging to the island's west coast where legions of tourist hotels are located.

"We have now found that the port city project had done an environment impact assessment and that says there is no harm (to the environment)," said Mr Senaratne who is also the health minister.

Launched under the last government during Chinese President Xi Jinping's visit to Sri Lanka in September, the project aims to give Beijing a firmer foothold in the Indian Ocean region.

The project had also been a symbol of previous strongman Mahinda Rajapakse's heavy reliance on Chinese funding for infrastructure work in the island nation.

Beijing has been accused of seeking to develop facilities around the Indian Ocean in a "string of pearls" strategy to counter the rise of its Asian rival India and secure its own economic interests.

Senaratne said Sirisena will visit Beijing in March after India Prime Minister Narendra Modi visits Sri Lanka a few days earlier.

Mr Sirisena is also due to travel to New Delhi on February 16 for a brief official visit that includes talks with Mr Modi.

China's huge investments in Sri Lanka and other South Asian nations in India's neighbourhood have caused unease in New Delhi.

Indian diplomats have privately raised concerns about the port city venture, as it gives China ownership of one third of the total 233 hectares (583 acres) of reclaimed land.

Sri Lanka is a midway point on one of the world's busiest international shipping lanes that Beijing wants to secure as a maritime silk road for the 21st century.

Colombo hopes the city, which will have a Formula One track and a luxury marina, will attract another US$5 billion in foreign investment for property development.