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Sri Lanka reverses China’s Jaffna housing contract and awards deal to India

The Sri Lankan government announced it had reversed a decision to award China a $300m housing deal, and has instead chosen to pursue a joint venture with an Indian company.

The announcement comes as Sri Lanka’s prime minister Ranil Wickremesinghe visits new Delhi, where he will meet Indian Prime Minister Narenda Modi on Saturday.

The deal would have seen the government-run China Railway Beijing Engineering Group Co build 40,000 houses in Jaffna, after a successful proposal by the Chinese in April. The project was halted earlier this year after locals protested, demanding brick houses instead of concrete structures.

Sri Lankan government spokesman Rajitha Senaratne said that now, Indian firm ND Enterprises and two Sri Lankan companies would take over the construction, building 28,000 houses worth a reported 35.8bn rupees ($210m).

See more from Reuters here.

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