The Government has decided to enter into an agreement with China Merchants Holdings (International) Company Ltd to develop the Hambantota Port on basis of a Private-Public Partnership (PPP) with 80 per cent of the shares transferred to the company.
The port project is being developed at an estimated cost of US$1,394 million, with the government expected to convert US$1,080 million as equity under this agreement with the Chinese company.
It is a flagship company of the China Merchants Group and invested in the upgrading of the Colombo South Container Terminal.
It had also bid for the Mattala Airport for which the government had received two proposals.
These two projects were carried out by the previous government with financial assistance from China. A government source said a large percentage of the loans obtained for these projects would be converted to equity.
“This will help us reduce the debt burden to a great extent. It is a main budgetary requirement,” he said.
The government is also hoping to develop the SriLankan airlines on the lines of a PPP with several parties submitting 'Expressions of Interest'. (Kelum Bandara)