Delays Hit Chinese Projects in Hambantota and Colombo over Tax, Market Demands
- CNL Reporter
- May 5, 2025
- News
- Chinese Projects
- 0 Comments
Two high-profile Chinese projects in Sri Lanka—the Sinopec oil refinery in Hambantota and a Colombo Port logistics centre—are facing delays due to investor demands for extensive tax breaks and relaxed market conditions.
Sinopec, China’s state-owned energy giant, has requested the removal of export-only conditions and sought permission to sell all refinery output locally, raising fears of market dominance and risks to energy security.
The US$3.7 billion project was the only bid left after others withdrew, but the government insists it must adhere to the tender process.
Meanwhile, the Colombo Port logistics centre, led by China Merchants Port Holdings, has stalled after the government failed to confirm its Strategic Development Project (SDP) status.
IMF objections to such incentives have led to investor dissatisfaction. The project has since been downsized, with staffing and office space scaled back, pending a feasibility report.
