The Sri Lankan government has decided it will reconsider restarting the 'Port City' project, a Chinese-funded development.

Cabinet spokesperson Rajitha Senaratne said the government will consider an Environmental Impact Assessment report, before deciding whether to go ahead with the $1.5bn project.

The project was reviewed by the new government along with several others initiated by former president Mahinda Rajapaksa. Right after the election, the government announced it would cancel the project.

India’s road transport and highways minister, Nitin Gadkari, said that a proposal for bridging the divide across the Palk Strait had been submitted to the Asian Development Bank (ADB), for a pre-feasibility study and subsequent financing.

The clarification was made in light of comments by a United National Party (UNP) minister alleging that Mr Obama was expected to visit Sri Lanka before the end of the year.

The Bodu Bala Sena (BBS), referring to Sri Lanka’s reconciliation task force head Chandrika Kumarataunga as the sister of the leader of the Liberation Tigers of Tamil Eelam (LTTE), urged the public to take action against a 'political project of reconciliation in the country.'

Sri Lanka's Justice Minister Wijeyadasa Rajapakshe said the government will conduct a credible, domestic inquiry, in response to a statement by Human Rights Watch earlier this week, demanding an international process for accountability.

"I must say that our domestic inquiry would definitely be a credible mechanism acceptable to the international community. We are in constant touch with the relevant global agencies and organizations in constituting this panel for a credible investigation.

“Sri Lanka has also sought the advice of eminent persons like Sir Desmond De Silva of UK who has a thorough knowledge on International Humanitarian Law. The term of reference, formation and the composition of the inquiry panel would be known by before the UNHRC report releases in September," the minister told the Daily Mirror.