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 crisis struck.
In August 2025, President Anura Kumara Dissanayake told Parliament that China’s Exim Bank would resume funding for the Kadawatha–Meerigama Expressway under a concessional loan scheme and that the loan was expected to be approved at the next Cabinet meeting. On August 18, 2025, President Dissanayake formally relaunched construction, praising China in his remarks, while Sri Lanka’s Chinese Ambassador also addressed the ceremony. China’s state news agency, Xinhua, reported on the event:
“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.
Dissanayake made the remarks while attending a ceremony marking the recommencement of construction of Section I of the Central Expressway, 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 in the friendship between the two peoples, he noted.
Qi expressed the hope and belief that all parties involved would advance construction in a dedicated and practical manner, ensuring the project’s timely and high-quality completion so that it could benefit the Sri Lankan people at the earliest opportunity.
The Central Expressway will eventually connect Colombo, the capital of Sri Lanka, with the central city of Kandy, while linking with three existing expressways to form an integrated network.”
It has now been almost a year since President Dissanayake and the Chinese Ambassador marked the restart of construction. Yet, despite the ceremonial launch in August 2025, there was no subsequent progress on funding. Reports attributed the delay to the failure of China’s Exim Bank and the Sri Lankan government to reach a new financing agreement, as penalties and costs arising from the project’s prolonged delays had increased.
However, sources close to China suggest that the real reason construction stalled after the August 2025 relaunch was Beijing’s frustration that the Sri Lankan government had not decided whether to lift its ban on Chinese research vessels entering Sri Lankan waters. According to these sources, this prompted China to adopt a go-slow approach toward its projects in Sri Lanka.
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, where both sides agreed to restart the Kadawatha–Meerigama Expressway project. Another delegation from China’s Exim Bank 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 an important question: what has changed on China’s side? Has Beijing concluded that maintaining its hard line on the research-vessel issue is only accelerating the expansion of American and Indian influence in Sri Lanka? Having paused its engagement over the ship-ban dispute, is China now preparing to re-engage in the geopolitical contest in Sri Lanka in response to growing U.S. activity in the country?
