The Governor of the Central Bank, Ajith Cabraal, said on Monday that the government is going ahead with the building of a 4,000 roomed sports village and a new athletic stadium.

It was expected that the plans would be scrapped following the defeat of Hambantota’s $8 million bid to host the Commonwealth Games in 2018, especially after the debacle of hosting the cricket world cup earlier this year.

Expressing dismay at the “chauvinistic attitude” of the Sri Lankan state, former US Deputy Secretary of State said on Friday the international community was united in its criticism of Sri Lanka’s conduct in the north and east and that President Mahinda Rajapaksa would not be welcomed internationally unless conditions there improved.

Speaking alongside Mr. Armitage at the launch of the Norwegian evaluation of Oslo’s peace process in Sri Lanka, and echoing his message, Norwegian minister for Environment and International Development, and former peace envoy, Erik Solheim also said the question of accountability for the mass killings of civilians in last phase of the war “will not go away”, and that “the only way the Sri Lankan state can reduce the impact of this is to reach out to Tamils and find a way of resolving the Tamil issue.”

They were speaking in Oslo at the formal launch of the evaluation report on Norway’s protracted peace role in Sri Lanka, at which the question of Sri Lanka’s future was also discussed.

Mr Armitage told the audience,

“I don’t think anyone disagrees that the Tamil people have been mistreated and are continuing to lack – across the board – fundamental freedoms, dignity, etc,”

“Much to my dismay the government of Sri Lanka is still caught up in a chauvinistic attitude,”

“I don’t think they’ve been far sighted enough in their approach to the north and east. There has been a somewhat lessening of violence there, somewhat lessening of the abductions and things of this nature, but not sufficient.”

“From the US point of view we are quite dismayed at the lack of progress in human freedoms, human rights, etc, and I made that view known [to President Rajapaksa].”

“But what to do about it is the question."

"[Firstly] the international community is generally coalesced around the fact that the north and the east particularly need protections, and the government of Sri Lanka has to move in that direction. … That is the united message the international community gives.

Below are extracts from US Deputy Assistant Secretary of Defense for South and Southeast Asian Affairs Robert M. Scher’s speech at Sri Lanka’s maritime security conference on Monday:

International credit rating agency, Moody's Investors Service, slammed the government's expropriation bill on Monday, as "credit negative" and a move that will "increase investor uncertainty".

In a statement Moody's said,

"The government's seizure of assets creates ambiguity around the protection of private property in Sri Lanka,"

"Despite authorities' statement that this is a one-off move, the measure may undermine the predictability of future policies and increase investor uncertainty, which would make it credit negative for Sri Lanka."

“It is unclear, however, whether the assets will be managed by the state or resold to other investors, and how performance will be revived,”

"The use of the fast-track procedure, which we believe limits public scrutiny, largely reflects the tendencies of the current government to exert strong and direct influence over the economy."

The Sri Lankan Government is struggling to revive entities owned by the state, the Sunday Times reports.

23 public companies, which have been underperforming for years, were supposed to be re-structured and handed over to prospective investors.

Reports have stated that the United Kingdom and South Africa have pulled out of the “Galle Dialogue Maritime Conference” hosted by the Sri Lankan Navy and Ministry of Defense, which is due to commence on Monday.

India's Prime Minister, Manmohan Singh, speaking directly to Sri Lankan president Mahinda Rajapaksa, has condemned the Sri Lankan navy attacks of Tamil fishermen, deeming them "totally unacceptable".

The bilateral talks took place on the sidelines of the SAARC summit on Thursday.

The Australian Gold Coast has won the bid to host the 2018 Commonwealth games, beating Sri Lankan President Mahinda Rajapakse’s hometown of Hambantota.

The decision was made at a meeting of the Commonwealth nations on the Caribbean Island of St Kitts this morning, with the Gold Coast gathering 43 votes and Hambantota only managing 27.

The announcement sparked celebrations for the Australians, with the Games predicted to deliver $2 billion in economic benefits and around 30,000 jobs in the next 7 years.

A Commonwealth Games Federation Evaluation Commission also stated that the Gold Coast was a “low risk” venue for the games, while Hambantota was “medium to high risk”.

The report went on to say that “the majority of telecommunications infrastructure required for the Games venues does not currently exist”, acknowledging that Hambantota does not currently have an international airport and only 1009 accommodation rooms.

It will come as a bitter blow for the Sri Lankans who were reported to have paid British firm Pmplegacy, owned by Chime Communications, $2.3 million for PR work for the bid.

Also flown to St Kitts were former cricket players Aravinda de Silva and Muttiah Muralitharan.

Earlier Muralitharan had made an impassioned plea to the Commonwealth, likening the 2013 bid to the 1995 Rugby World Cup in South Africa. He said both events were a chance to unite the respective countries, and even compared Mahinda Rajapakse to Nelson Mandela.

Former British Prime Minister, Tony Blair, writing in the UK Guardian on Friday, urged the world to protect the religious freedoms of minorities in Sri Lanka, including Hindus, from religious extremism by the Sri Lankan state.

Integral to the Sri Lankan constitution is the state's responsibility to 'protect and foster' Buddhism.

Extracts from Blair's article:

"It is not only the acts of terror that should alarm us. It is the extremism that promotes persecution of religious minorities, too.

"The challenge is that much greater where human dignity is not respected and freedom of religion denied. This results in a general oppression of people of faith.

"It means we must support Muslims in Gujarat, India; non-Orthodox Christians in Moldova; Bahai's in Iran; Ahmadis in Pakistan; all Christians in north Africa; Hindus in Sri Lanka; Shia in several Sunni majority countries, and other places.

"The essence of democracy is that it is pluralistic. It is inherently secular, even if rooted in cultures that are profoundly religious. This is where democracy-friendly religion really means something very important in the way society is governed.

"It is about free media; freedom of expression; and about freedom of religion. It is also about an independent judiciary and the rule of law and even about free markets albeit with appropriate government intervention and regulation."

Sri Lanka’s stock market reacted to the uncertainty caused by the expropriation bill with plummeting numbers of trades.

After a holiday on Thursday, turnover on Friday was 393.7 million Sri Lanka rupees, a fraction of this year’s average of 2.5 billion per day.

Speaking to Reuters news agency, on condition of anonymity, a senior Obama administration official is reported to have said,

The British Charity Freedom from Torture, has stated that the Sri Lankan government’s commitment to eradicate torture cannot be trusted and call upon the international community to ensure that it is held accountable for any breach of the UN Convention Against Torture.

In a statement released on Friday, the group said,

“It is clear as day under international law that torture is wrong in all circumstances, whoever the victim – be they combatant or civilian, man or woman. Allegations must be investigated; torturers must be held to account."

"Let us hope that governments around the world do not let Sri Lanka off the hook if the government fails to achieve the justice it has promised through its own means."

"Given the shocking cases of torture we have documented – survivors arriving at our door in the UK with the resulting mental and physical scars still fresh – the government's word on torture is not something we can hold in any regard.”

It comes after the UN Committee Against Torture meeting concluded this week, where Sri Lanka’s abuses were once again under the spotlight.

Sri Lanka’s parliament has passed the controversial nationalisation bill, clearing the way for the government to take over 37 companies.

The "Revival of Under-performing Enterprises and Under-utilised Assets Act" allows the takeover of companies that are deemed to be underperforming by the government.