The Sri Lankan government announced on Thursday that the Chinese-run Port City project will continue, after a cabinet meeting on the issue.

The project was reviewed by the new government along with several others initiated by former president Mahinda Rajapaksa.

State-owned China Communications Construction Company Limited (CCCC) had defended the project, saying all procedures of the procurement regulations were followed before the deal was signed with the previous government.

Sri Lanka’s president, Maithripala Sirisena, in a message to mark Chinese new year on Wednesday, pledged to “deepen strategic cooperation” with the Chinese government, reports Xinhua.

In his address, Sirisena said,

“Looking back at 2014, I am pleased that the historic state visit to Sri Lanka of Chinese President Xi Jinping in September last year has provided us with the opportunity to further evaluate our robust relationship and deepen the strategic cooperative partnership in a manner beneficial to our two countries peoples.”

The Indian Prime Minister Narendra Modi congratulated Sri Lanka on its independence day and said he looked forward to welcoming President Maithripala Sirisena later this month.

"On their Independence Day, my greetings to people of Sri Lanka. The bonds of history, culture and shared values that we share are unbreakable,” the prime minister tweeted.

"My best wishes for the development of Sri Lanka in the years to come. I look forward to welcoming President Sirisena later this month."

A senior commander of Sri Lanka’s armed forces, Shavendra Silva, who is thought to be responsible for committing mass atrocities, has been accepted to study at India’s National Defence College (NDC) in Dheli, reports jdslanka.

A Tamil National Alliance (TNA) councillor in the Northern Province, Thurairasa Ravikaran was interrogated by the Sri Lankan Navy on Thursday, reports Uthayan.

Mr Ravikaran was stopped by navy personnel and questionned after being accused by the officers of possessing military equipment.

He was returning home after distributing school equipment to orphaned school children at the Mullaitivu Redbaana Bharathi Vidyalayam.

"This incident shows the increase of military oppression in the North. The identification of school equipment as military equipment is completely unacceptable," Mr Ravikaran told the Uthayan, stating that he had expressed his condemnation of the sham exercise to the officers directly.

Tamil National Alliance MP P Ariyanenthiran stated Tamils in Sri Lanka still suffer at the hands of state security forces despite the change in government, adding that the situation was “not yet conducive for diaspora Tamils to return”.

Sri Lanka's new president, Maithripala Sirisena, on Thursday renewed the deployment of the military across the island, reports AFP.

"By virtue of the powers vested in me, I, Maithripala Sirisena, do by this order call out all the members of the armed forces...for the maintenance of public order," read a presidential decree reportedly seen by the news agency.

Sri Lanka's military, which has seen an ever increasing budget and troop deployments since the end of the armed conflict in 2009, is concentrated across the Tamil areas of the North and East.

Condemning the ongoing militarisation and the renewal of the former regime's policy by the new president, the Tamil National Alliance (TNA) spokesperson, Suresh Premachandran told AFP:

"We have been asking for the withdrawal of troops from the north and the east, but this order only serves to continue the army presence."

The new Sri Lankan president, Maithripala Sirisena, marked the anniversary of the state's independence from British colonial rule with a ceremony with the Buddhist clergy and a military parade.



Paying tribute to the military, Mr Sirisena praised the military victory of 2009, led by the former president, Mahinda Rajapaksa.

In his address, Mr Sirisena said:

"The light of freedom, which remained covered under the shadow of terrorism, began to shine again after the eradication of the brutality of terrorism by the Government of President Mahinda Rajapaksa in the Year 2009. Although our sovereignty and territorial integrity was retained by this, the need to proceed further towards national unity through genuine amity and friendship among people is a task that needs achievement. Just as the land was united, it remains necessary to join all Sri Lankans with the bonds of unity."

"As we celebrate the gaining of Independence, today, we recognize our bounden duty to give all honour and respect to the members of the Security Forces who made great sacrifices to protect our sovereignty and territorial integrity in the battle against terrorism."

The US Assistant Secretary of State for South and Central Asian Affairs Nisha Biswal said a lot of work remains to be done in Sri Lanka, in a statement released at the conclusion of her visit to the island.

Ms Biswal said she heard the TNA leadership's perspective for "meaningful progress on reconciliation and political inclusion", during her meeting with the party in Jaffna.

The assistant secretary also had "productive conversations" with President Maithripala Sirisena, Prime Minister Ranil Wickremasinghe and Foreign Minister Mangala Samaraweera, expressing US willingness to work with the new government.

"Clearly, there is a lot of work to be done. The United States looks forward to partnering with the Sri Lankan people to address the challenges and help Sri Lanka realize its true potential," she said.

The surprise result of the presidential election, which saw Mahinda Rajapaksa defeated by his challenger Maithripala Sirisena, is proving to be a step back for investors, reports Bloomberg.

Sri Lanka's stock index is the world's fifth worst performer since the election last month, while the new government last week cancelled casino licenses, reduced public investment and introduced a one-off 25% tax on companies or individuals who reported more than $15mn in profits.

Australian mogul James Packer has already withdrawn from a $350mn hotel resort, with several Chinese projects also now in danger of being cancelled.

“The new government has gone beyond condemning what it sees as overpriced or immoral projects and targeted big domestic business as a whole,” Sasha Riser-Kositsky, Asia Associate at Eurasia Group, said in a Jan 30 note. The moves increase uncertainty for foreign and local companies and “will depress private investment,” he said.