COLOMBO - Sri Lanka's government has handed over the contract of a large dam project to a Chinese company, an official said here Friday.

Sinohydro Corporation was given the construction of the Moragahakanda Project, which is the second largest tank ever built in Sri Lanka, according to Irrigation and Water Resources Management Minister Nimal Siripala de Silva.

"We are grateful for the assistance given by China. In a few years we hope to become a country that will not depend on foreign loans and fund our own development," Silva said at the signing ceremony.

"This is yet another step in that direction," he said.

The total cost of the venture is estimated to be $382 million.

In the first stage, the project is expected to provide water to 82,000 hectares of farming land.