Controversial project in Sri Lanka was run by a sanctioned firm. The new foreign secretary was paid to lobby investors
Lord Cameron helped to secure up to $3 billion in investment for a controversial project run by a sanctioned Chinese company and launched by President Xi, it can be revealed.
The former prime minister was paid to visit Dubai and Abu Dhabi and lobby potential investors on behalf of Port City Colombo, a development in the Sri Lankan capital that critics fear could become a Chinese military base.
It is part of the Belt and Road Initiative, Beijing’s flagship foreign policy aimed at extending Chinese trade and military influence, and was unveiled by Xi on a visit to the island almost ten years ago.
The developer’s parent company is China Communications Construction Company (CCCC), a state-run firm blacklisted by America for building military bases in disputed waters. US citizens and companies are banned from holding shares in the Beijing-headquartered company.
Cameron, the newly appointed foreign secretary, became involved in the port during a visit to Sri Lanka in January where he met Yang Lu, director of CHEC Port City Colombo, the CCCC-owned developer that has invested more than $1 billion.
The pair shook hands and posed for photos as part of a tour. Cameron, 57, also accepted a gift from Lu. A source close to Cameron said he could not remember what it was other than a “token with no value whatsoever”.
On September 26 he was paid to fly to the UAE to raise funds for the project. Speaking at back-to-back events at the Ritz Carlton in Abu Dhabi and the Burj Khalifa in Dubai, he implored delegates from Middle Eastern sovereign wealth funds to pour money into the port. According to leaked footage, he said he was “struck by the immense opportunity” of the project.
Cameron has said he was paid by the Washington Speakers Bureau, a US speaking agency, which was in turn contracted by the Sri Lankan branch of KPMG. His spokesman said: “Mr Cameron has not engaged in any way with China or any Chinese company about these speaking events.”
The claims are challenged by Dilum Amunugama, the Sri Lankan investment minister, who was reported in local media last month as saying: “The whole event was handled by CHEC Port City. The government did not select David Cameron. He was selected by the Port City company.”
The visits were brokered by Nirj Deva, a former Conservative MP and MEP who ran an EU-China Friendship Group and is an adviser to the Sri Lankan president. He said Cameron did “brilliantly”, demonstrating an intimate knowledge of the “clauses, currency controls and tax holidays” designed to lure investors.
A source close to the project said Gulf investors pledged $3 billion off the back of his visit, none of which has been publicly announced. The funding remains subject to legal agreement. Asked if the money could have been raised without Cameron, Deva, 75, said no.
As the new foreign secretary, Cameron will have to take a harsher line on China than his government did during the “golden era” of relations. In its latest defence and foreign policy document, the government called China an “epoch-defining challenge” to the international order.
The US sees the Belt and Road Initiative as a direct threat to its interests. Luke de Pulford of the Inter-Parliamentary Alliance on China said: “Our allies will rightly take a dim view of Cameron thumbing his nose at them in favour of CCP hard men. It doesn’t bode well for the special relationship or for global Britain. Only Beijing wins from this appointment.”
Cameron has declined to say how much he was paid for the visits but has already faced controversy for fronting a failed UK-China investment partnership after leaving office.
He became involved in the port project after attending a meeting followed by lunch with Ranil Wickremesinghe, the Sri Lanka president, during a part-family holiday, part-working visit. The island had recently been plunged into an economic crisis after defaulting on its foreign debts which total $50 billion.
Deva said Cameron had asked: “How can I help, how can I help get Sri Lanka out of its debts?” Deva said: “The president said ‘get some money in here, help us get investment so we can get rid of all these people trying to control us’. And David said: ‘Yes, I’ve been involved in Sri Lanka for a long time, I’ve known Sri Lanka well.’ And he said: ‘Yeah, I’ll do something. I’ll help.’”
Cameron, who at the time held a paid teaching post at New York University’s Abu Dhabi campus, said he knew “lots of people in the UAE who might be able to help”.
Deva denied China will have lasting control of the project, which will grant investors a foothold in the Indian Ocean. He said bringing in new finance would help Sri Lanka repay China and, in due course, reduce its reliance on Xi’s government. Cameron is said to have agreed.
Deva, former head of the EU-China Friendship Group, recalled: “David, and I don’t want to damage his relationship with China whatever he has, he genuinely understood that the way . . . the way to get things back to normal is to pay off the Chinese. So he went to where the money is. And he got 90 of the richest UAE companies and told them to buy it. Give the money to the Sri Lankan government, they pay off their debt, and Sri Lanka is off the debt hook.”
After lunch with the president, Cameron took part in a tour of the site, which is set to boast a casino, hotels and homes when it is complete in 2041. He was greeted by Lu, the Chinese head of the project, and other executives. The tour has been used in promotional material.
In August Cameron visited the Gulf to host two talks entitled: “Now is the time to invest in the Port City Colombo.”
Cameron was nominated for a peerage the week before last. Members of the House of Lords Appointments Commission, which vets nominees, are said to have been annoyed by the fast-track timetable but cleared him for approval.
The website Politico first reported details about Cameron’s links with the port project last month. His spokesman denied he had any direct involvement with the Chinese firm in relation to his speaking events.
His spokesman said last night: “David Cameron spoke at two events in the UAE organised via Washington Speakers Bureau, in support of Port City Colombo, Sri Lanka. The contracting party for the events was KPMG Sri Lanka and Mr Cameron’s engagement followed a meeting he had with Sri Lanka’s president Ranil Wickremesinghe earlier in the year.
“Mr Cameron has not engaged in any way with China or any Chinese company about these speaking events. The Port City project is fully supported by the Sri Lankan government.”
Source: The Sunday Times (UK) 19/11/23