Sri Lanka cancels land sale to China firm

Oct 25, 2011 (LBO) – Sri Lanka has cancelled the sale without tender of prime land in the capital to a Chinese defence contractor to build a hotel and is renegotiating the deal with alternate land being offered. Minister of economic development Basil Rajapaksa said the government had changed its policy and decided not to sell state land and instead give land out to investors on long-lease.

“The government faced a slight setback in this,” minister of economic development Basil Rajapaksa said.

“But this is a government decision. We felt it is better that government land, especially this type of commercial land, is given on long lease, instead of being sold.”

Chinese defence contractor China Aviation Technology Import-Export Corporation (CATIC) was sold seven acres of state-land in Colombo’s ‘Galle Face’ beachfront earlier this year.

CATIC paid 54.4 million US dollars in April 2011 and four acres of land was transferred to the firm.

But the deal was slammed by Sri Lanka’s main opposition United National Party which raised concern that the land was sold without open tender.

The UNP said that particularly in relation to the CATIC deal procedures set under a strategic investment law had