Two major Chinese-backed projects in Sri Lanka — the Sinopec oil refinery in Hambantota and the Colombo Port development — have reportedly been delayed.
According to sources, Sinopec has requested to increase the originally agreed local market supply quota of 20% for its oil products. The massive export-oriented refinery project, which involves an investment of USD 3.7 billion, has already received substantial tax concessions. Reports also indicate that the company has asked for more land and raised concerns over the water scarcity in Hambantota.
Meanwhile, a proposed logistics hub to be developed as a Strategic Development Project, involving China Merchants Ports Holdings (70%), Access Lanka (15%), and the Sri Lanka Ports Authority (15%), is also on hold. The delay stems from concerns that a 15-year tax holiday, which was agreed upon with the developers, may violate International Monetary Fund (IMF) conditionalities.
