Construction of the Kadawatha-Meerigama expressway, a China-funded highway in Sri Lanka, ground to a halt in 2022 as the country’s economic crisis took hold. Work had begun under an agreement combining Chinese loans with contributions from the Sri Lankan government, but the project stalled midway through construction when the economic crisis hit.
In August 2025, President Anura told Parliament that China’s Exim Bank would resume funding for the Meerigama-Kadawatha expressway under a concessional loan scheme and that the loan amount was expected to be approved at the next Cabinet meeting. On August 18, 2025, President Anura formally relaunched construction work, praising China in his remarks, with Sri Lanka’s Chinese ambassador also speaking at the event. China’s state news agency Xinhua reported on the ceremony.
‘Sri Lankan President Anura Kumara Dissanayake said Tuesday that the resumption of a Chinese-built project in Sri Lanka shows the close communication and cooperation between the two countries and the sound development of bilateral relations.
He thanked China for extending a helping hand during Sri Lanka’s economic crisis.
Disanayake made the remarks while attending a ceremony for the recommencement of construction of the Central Expressway section I from Kadawatha to Mirigama undertaken by Metallurgical Corporation of China Limited (MCC).
The president said the project is an important national undertaking for Sri Lanka. He thanked China for supporting the country in improving its economy and people’s livelihoods. He added that the project’s resumption testifies to and facilitates Sri Lanka’s efforts to overcome its economic difficulties and move toward stable development.
Chinese Ambassador to Sri Lanka Qi Zhenhong said the Central Expressway project is crucial for Sri Lanka’s recovery and revitalisation. It also stands as a new landmark of the friendship between the two peoples, he noted.
Qi expressed the hope and belief that all parties involved will advance construction in a dedicated and practical manner, ensuring the project’s timely and high-quality completion so that it can benefit the Sri Lankan people at an early date.
The Central Expressway will eventually connect Colombo, the capital of Sri Lanka, with the central city of Kandy, and link up with three existing expressways to form an integrated network’.
It has now been almost a year since President Anura and the Chinese ambassador marked the restart of construction – yet despite the ceremonial launch in August 2025, there had been no progress in funding. Reports attributed this to the failure of China’s Exim Bank and the Sri Lankan government to reach a new financing agreement, as penalties and costs linked to the project’s delays had risen. However, sources close to China suggest the real reason construction stalled after the August 2025 launch was Beijing’s frustration that the Sri Lankan government had not decided on lifting its ban on Chinese research vessels entering Sri Lankan waters — leading China to adopt a go-slow approach on its projects in the country.
Now, in a sudden development, a delegation from China’s Exim Bank visited Sri Lanka last week and met with the Deputy Minister of Finance, agreeing to restart the Kadawatha-Meerigama expressway project. A Chinese Exim Bank delegation is expected to arrive by the end of this month to sign the formal agreement.
The Sri Lankan government has still not lifted its ban on Chinese research vessels. This raises the question: what has changed on China’s side? Has Beijing concluded that its continued hold on the research-vessel issue is only accelerating the expansion of American and Indian influence in Sri Lanka? Having paused over the ship-ban dispute, is China now gearing up to re-enter the geopolitical contest in Sri Lanka in response to growing U.S. activity in the country?
