The cabinet set up a panel to probe the contract awarded to China CAMC Engineering (File)
Sri Lanka's government on Wednesday launched an investigation into a $700 million river diversion deal that had been finalised with a Chinese company weeks before the fall of the previous regime.
The cabinet set up a panel to probe the contract awarded to China CAMC Engineering on the eve of Mahinda Rajapakse's defeat in the January 2015 presidential election, government spokesman Rajitha Senaratne said.
"Over four billion rupees ($30 million) had been paid just the day before the elections," Senaratne told reporters.
"We want to see whether it is feasible to go ahead with this project and if not, how we can recover the advances already paid to the Chinese firm."
He said there were several irregularities in awarding the contract, worth nearly $700 million, and the new panel appointed by the cabinet would conduct a detailed study.
The new government, which came to power on a pledge to end corruption during Rajapakse's decade in office, has already suspended some Chinese-funded projects.
China, the largest single lender to Sri Lanka, secured contracts to build roads, railways and ports under Rajapakse, who is under investigation over allegations of graft.
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