India, July 21 -- Sri Lanka is set to end tax breaks for the Port City Colombo project being implemented by a Chinese state-run firm as part of commitments under an International Monetary Fund (IMF) bailout package, a move expected to hit the viability of the $1.4-billion venture.

Following the fourth and latest review for Sri Lanka's extended fund facility from the IMF to help overcome the island nation's worst economic crisis, the government in Colombo has committed to amend the Strategic Development Projects (SDP) Act and Port City Act within this year to introduce "transparent, rules-based, best-practice aligned eligibility criteria for time-bound" incentives and to reduce the length of tax holidays.

There are already significant co...