China has denied reports that Sino Soar Hybrid Technology Co, the Chinese firm which was awarded three power projects by the Sri Lanka government, had withdrawn from the project. Several media reports, both in Sri Lanka and India, reported that China canceled the deal following objections from India. 

“The company will continue the contract after the cabinet [Sri Lankan] approval. There is no withdrawal,” the Chinese Embassy in Colombo said on Friday, the Daily Mirror said.  The embassy further added that the Sri Lankan government had suspended the execution of the project earlier this year but the contract was still valid. 

The same firm this week has signed a contract with the Maldivian government for setting up power plants in 12 islands south of Male, the archipelago’s capital. For the Maldives, which officially follows the 'India First' policy, it was an unusual move.  

In January this year, the Sri Lankan government had cleared a proposal, awarding a contract to the Chinese firm for setting up power plants in three islands, located off the Jaffna Peninsula in the Palk Bay, some 50 km off India’s Tamil Nadu coast. The project was to be executed with a loan from the Asian Development Bank (ADB). 

However, India objected to the project in its close vicinity, citing security concerns, and had offered $12 million grant assistance to the Sri Lankan government, making it conditional to the execution by an Indian firm. Following this the Sri Lankan government withdrew permission to the Chinese firm to implement the project.

However, confusion arose this week when the Chinese Embassy put out a tweet, announcing the signing of a deal between the Chinese firm and the Maldivian government. 

The embassy tweeted, “Sino Soar Hybrid Technology, being suspended to build Hybrid Energy system in 3 northern islands in [Sri Lanka ]due to 'security concern' from a third party, has inked a contract with Maldivian gov't on 29 Nov to establish solar power plants at 12 islands in [the Maldives].”

The “third party” was veiled reference to India, which had objected to the project in Sri Lanka. However, the vague wording in the tweet gave a sense as if China was canceling the project in Sri Lanka— which the embassy denied on Friday following several reports.

(SAM)