Chinese firms now dominate major housing construction projects throughout Sri Lanka and have been commissioned to carry out most large-scale construction projects across the island, especially in urban areas and conflict or natural disaster-affected regions.
These initiatives are aligned with the Sri Lankan government’s efforts to provide affordable housing for low-income families and displaced communities, especially in the post-war regions of the North and East, Ministry of Rural and Urban Development, Housing, and Construction revealed.
China has, through state-owned giants such as the China National Offshore Oil Corporation and the China State Construction Engineering Corporation, provided both financial backing and technical expertise toward the rebuilding of homes and critical infrastructure. This involvement in post-conflict reconstruction extends to urban development, with Chinese companies securing several contracts to construct affordable housing complexes in major cities like Colombo.
In Colombo, the Chinese government has committed to funding five major housing projects aimed at benefiting the low and middle-class population, with an estimated cost of US$ 350 million.
So far, US$ 200 million has been received and with that amount of money, 2,500 housing units have been allowed to build.
These projects have been enabled by the Urban Development Authority, or UDA, in charge of government lands, but the UDA has also provided opportunities for foreign investments in house-building projects all over the country, even in cities such as Kandy and Nuwara Eliya, a high-ranking official of the UDA disclosed. .
Under a greater initiative by the Chinese government, close to 2,000 houses are to be constructed for low-income families by three construction firms from China.
The Cabinet of Ministers has given approval this week to a proposal for the award of contract for those housing units. Accordingly, M/S China Railway 25th Bureau Group Co. Ltd. will construct 575 housing units in Moratuwa and 108 in Kottawa while M/S China Harbor Engineering Company Ltd. will build 586 units in Dematagoda and 112 in Maharagama.
Further, M/S Shanxi Construction Investment Group Co. Ltd. will construct 615 housing units in Paliyagoda.
This demand has seen high-rise buildings and luxury apartments spring up, especially in Colombo, with most frontline construction companies being Chinese firms. The UDA sources further disclosed that such projects are usually financed by Chinese banks, with Chinese engineering expertise, to meet the increasing demand for housing by the upper-middle class and foreign investors.
The Colombo Port City project, one of the large-scale infrastructure and real estate development projects funded by China, envisages residential areas and is projected to add thousands of housing units when completed.
Beyond areas classified as urban, Chinese companies are into the rebuilding of homes for IDPs in post-conflict areas that include Jaffna in the Northern Province.
The Chinese government has pledged to finance low-income housing projects as a solution to the increasing lack of housing in Sri Lanka, mainly among the urban poor.
Financing is commonly done through loans from Chinese banks and collaborations between state-owned enterprises.
While these partnerships have brought much-needed funds and expertise, they have also raised many eyebrows with regard to Sri Lanka’s soaring debt from China, raising questions about the long-term financial implications of such engagements.
