Sri Lanka is once again reviewing a decision to press ahead with the Chinese funded ‘Port City’ project in Colombo, with the docking of Chinese submarines in the capital last year causing “serious suspicion”, said a government minister.

The $1.5 billion development project with a Chinese company was agreed during the former president, Mahinda Rajapaksa's term in office, with the development set to include shopping malls and apartments. However, Sri Lanka's current president, Maithripala Sirisena, pledged to cancel the deal, a move that led to investor uncertainty, as doubts rose over the new government's economic policies.

Sri Lanka's Power and Energy Minister Champika Ranawaka told a Foreign Correspondents Association forum that though China had played a crucial role in Sri Lanka's development, the island would never become a "tributary state".

"There was a serious suspicion because of the submarines,” said the minister, referring to the docking of Chinese submarines in Colombo last year.

“If the Colombo port and port city are going to be used for military operation by Chinese government, then it will create serious problem in India and here in Sri Lanka as well," he added.

Last month, China's foreign minister spokesperson said his country had been assured that projects already agreed would go ahead. Sri Lanka's Prime Minister Ranil Wickremesinghe said earlier this month  that a final decision was yet to be reached.

Other options were being reviewed said Mr Ranawaka, saying "there is a new suggestion not to give freehold land and that land should be controlled and subjected to the Sri Lankan law."

His comments come after Kabir Hashim, Sri Lanka’s investment-promotion minister, expressed security concerns over the $1.5 billion project, which would see a Chinese state-owned company, hold land in a high-security zone close to a planned expansion to Colombo’s port.

“The port city project has to be completely looked at,” Mr. Hashim told reporters in January. “You cannot have land given on freehold basis to another country in a high security zone.”

See our earlier posts:

Foreign Minister Mangala Samaraweera to visit China (17 Feb 2015)

Sri Lanka keen to maintain traditional ties with China - PM (13 February 2015)

No final decision made on 'Port City Project' says Ranil (07 February 2015)

Sri Lanka president to visit China (06 February 2015)

Sri Lanka's president to 'deepen strategic cooperation' with China (05 Feb 2015)

Chinese ‘Port City’ to continue (05 Feb 2015)

Sri Lanka reconsiders cancellation of Chinese Port City project (23 January 2015)

Sri Lankan president assured us projects under construction will continue says China (20 January 2015)

Sri Lanka seeks IMF assistance to ease debt burden (20 Jan 2015) 



Ranil promises China continued cooperation (16 Jan 2015) 



New govt policies maybe seen as 'investor unfriendly' says global banking group (12 Jan 2015) 



China congratulates Sirisena, wishes to promote strategic cooperative partnership (09 Jan 2015)