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Sri Lanka
This Week in AsiaGeopolitics

Next Hambantota? Welcome to the Chinese-funded US$1.4 billion Port City Colombo in Sri Lanka

  • The building of a Hong Kong-style metropolis on reclaimed land in Colombo using US$1.4 billion of Chinese money sits uneasily with some Sri Lankans
  • They are still smarting from the loss of sovereignty involved in their last encounter with what critics call Beijing’s ‘debt diplomacy’

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A rendering of the Colombo Port City project in Sri Lanka, which is financed by the China Communications Construction Company. Photo: Handout
Marcello Rossi
When the sun goes down, Galle Face Green – the seaside urban park south of the financial district of Colombo, Sri Lanka’s capital – fills up with life. As makeshift stalls selling everything from tropical fruit to cheap clothes line the seafront, daytrippers, teenagers, and lovers throng the site next to the Indian Ocean.
Soon, the scenery they face will be quite different. Port City Colombo, an ambitious Chinese-funded project to build a new metropolis on a 665-acre island reclaimed from the sea, is set to rise just off the popular spot in a couple of decades. Rising in tandem, however, are concerns about the amount Beijing is lending Colombo, and the circumstances of those loans – with the controversial China-backed Hambantota Port looming large in Sri Lankans’ memory.

The government is talking up Port City, which will add an area the size of central London to Colombo, nearly doubling its current size. “It’s the first time we got the opportunity to develop an entire new city on a blank piece of land,” said Jagath Munasinghe, chairman of Sri Lanka’s Urban Development Authority. “It’s a completely new experience we can learn a lot from.”

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Renderings of the future city show a cityscape akin to leading Asian cities such as Hong Kong and Singapore. Gleaming apartment towers dot the skyline, with luxury hotels, glossy shopping malls, parks and canals giving way to fancy, low-slung residential units. Developers expect around 80,000 people will live in the city once it is completed, with another 250,000 commuting in daily.

The seafront of Galle Face Green, with the construction site of Colombo Port City in the background. Photo: Bloomberg
The seafront of Galle Face Green, with the construction site of Colombo Port City in the background. Photo: Bloomberg
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Port City, part of China’s expansive Belt and Road Initiative, is the biggest foreign direct investment in Sri Lankan history. It is financed by a US$1.4 billion loan issued by China Communications Construction Company, the mammoth state-owned engineering firm that is also the belt and road plan’s biggest builder.

In its proponents’ view, the project aims to address a problem that has long dogged Sri Lanka. Still recovering from a 26-year civil war with an economic cost that many estimates place at US$200 billion, the island nation’s US$90 billion economy doesn’t create enough jobs, making it a net exporter of labour.

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