There is no record of the mandatory environmental impact and feasibility studies for the project, nor is there any document that shows the government cleared it, Sri Lanka's Finance Minister Ravi Karunanayake told reporters about the Colombo Port City projects undertaken by China Communications Construction Co (CCCC).
"That's why we have asked them (CCCC) to show us any document that they may have been issued illegally, which they have failed to do so far," he said.
CCCC maintains all necessary project studies had been conducted and approved by the previous government.
Asked if any foreign company can start a project of this scale without a go-ahead from the Sri Lankan government and if blocking the project is tantamount to reneging on contractual obligation, Karunanayake put the onus squarely on CCCC.
"There was no clearance. And, I am told this company is blacklisted in other countries. You cannot just jump into the Indian Ocean and start filling it up," he said.
"I am told this company is blacklisted in other countries. You cannot just jump into the Indian Ocean and start filling it up. We want to work with China to fix the problems with projects like these and move on," he said.
Last week the new Sri Lankan government has temporarily suspended the project stated to be a key venture for China's new Maritime Silk Road (MSR) plans in the Indian Ocean region inking China with Europe via the Indian Ocean, the Red Sea and the Mediterranean Sea.
Rajapaksa was the fist to extend support to MSR which raised concerns in India over Chinese dominance in Indian Ocean.
The proposed city was planned to be built on 583 acres of land reclaimed from the sea.
Under the agreement 49.42 acres of land will be given to the Chinese firm on an outright basis, according to reports in the Sri Lankan media.
It was inaugurated by Chinese President Xi Jinping when he visited Sri Lanka last year.
The new government is also seeking to renegotiate several billion dollars of loans obtained by the previous Mahinda Rajapaka regime for high interest rates.