NEW DELHI: China's Belt and Road Initiative (BRI) is facing more challenges across South Asia over economic, political, security and geographical constraints, as evident from China Merchants Port Holdings' withdrawal from $392 million joint venture to develop a logistics hub in Sri Lanka's Port of Colombo, a new report has said.
The state-owned Chinese port operator's withdrawal highlights weakness in translating large-scale infrastructure investments into sustainable development outcomes, the report from Mekong News said.
Recent developments in Sri Lanka have renewed questions about the viability of some BRI projects and the latest withdrawal drew comparisons with Sri Lanka's Hambantota port, which was leased to a Chinese company for 99 years in 2017 amid financial pressures.
Though China-Pakistan Economic Corridor (CPEC) was designed to connect China's Xinjiang region with Pakistan's Arabian Sea coast through transport and energy infrastructure centred on Gwadar Port, it suffered from economic instability and energy-sector liabilities.
Further, financing difficulties and security concerns, including attacks on Chinese nationals and projects complicated implementation, the report said.
"The broader lesson is that infrastructure investment does not automatically generate sufficient revenue to service debt or produce sustainable development.
Although Pakistan remains strategically important to Beijing, close political relations have proved insufficient to guarantee the economic success of major infrastructure commitments," the report said. (IANS)