China to provide loan for rail track to key Lankan port

5 March 2013 06:40 am - 24     - {{hitsCtrl.values.hits}}

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COLOMBO (Reuters) - China's Export-Import Bank will provide a loan of $278.2 million to Sri Lanka to help lay a rail track to a key port which Beijing is building that has stoked concern in neighboring India.

The port of Hambantota on the southern tip of the Indian Ocean island nation is envisioned as a refueling and service point for cargo ships, which pass a few kilometers away on one of the world's busiest East-West shipping lanes.

Sri Lanka's finance ministry said on Tuesday that the Chinese loan will be used to construct a 27 km single-line track connecting Hambantota to Matara, the biggest coastal town in the south.

"The demand for transport between the Southern Province and other provinces of the country will increase due to developments in the Southern region and operations of the Hambantota Port," the finance ministry said.

Sri Lankan President Mahinda Rajapaksa been pushing for development of infrastructure projects in the south, since the end of the civil war in May 2009.

The $59 billion economy has been increasingly relying on China, both for financing and technical expertise for reconstruction projects.

Under the new railway loan, $200 million will be provided under a preferential buyer's credit facility and the balance $78.2 million will be a Chinese government concessional loan facility, the Sri Lankan finance ministry said in a statement.

The loan will be offered at a 2 percent annual interest rate with a repayment period of 20 years, including a five year grace period.

China has loaned $1.5 billion for construction of the Hambantota port and $209 million for a nearby airport, which will be launched on March 18.

Beijing's expanding influence in Sri Lanka has caused concern in India, which feels hemmed in by a string of similar port developments stretching from Myanmar to Pakistan and that it fears give the Chinese navy a strategic boost in the region.

Rajapaksa has rejected New Delhi's concerns and said China's presence was strictly for business reasons, not political.
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  Comments - 24

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  • Modaya Wednesday, 06 March 2013 03:58 AM

    Kawadada

    Buffaloa Citizen Tuesday, 05 March 2013 07:40 AM

    Looks like this fellow is a notorious borrower.

    Shan Tuesday, 05 March 2013 07:44 AM

    every thing only for Humbantota??

    sena Tuesday, 05 March 2013 07:48 AM

    I hope China wont build a rail track to the busy sea lane a few kilometers away in the sea .

    MirakRajBanda Tuesday, 05 March 2013 07:56 AM

    What's the bloody hell going on..... Borrowing from China means borrowing from Shylock.
    And all borrowing goes to Hambantota and the rest of the country take the burden. Funny man!!!

    Dalu banda Wednesday, 06 March 2013 01:37 AM

    Very negative comments. Those would not represent the views of General Public.

    Nihal Jayaweera Wednesday, 06 March 2013 02:10 AM

    Gonnu piduru kanawa gajarameta by taking all the available loans from everywhere.

    dell Wednesday, 06 March 2013 02:15 AM

    oh my god !!!! another loan????refusing USD500Mn and granting USD278Mn...ooops this is waste of money,,,

    Sapumal Bandara Tuesday, 05 March 2013 08:08 AM

    Balla piduru kanneth naha
    Kana gonata denneth naha

    R.Dias Tuesday, 05 March 2013 08:17 AM

    this story is a lie...Matara to Hambantota is 87 km...

    Sareek Tuesday, 05 March 2013 08:22 AM

    Poliya keeyada?

    Muhammad Tuesday, 05 March 2013 12:00 AM

    At 8.5% interest. via DM Android App

    China Tuesday, 05 March 2013 08:33 AM

    Thanks for that Idea Sena. We will market that to Sri Lanka

    PRASANNAJIT Tuesday, 05 March 2013 08:38 AM

    Ultimately we will end up like Tibet. Whoever praise the aid from China please go back and learn what happened to Tibet. Already China has got the foothold with a harbour and an airport.

    Tony Tuesday, 05 March 2013 10:34 AM

    27km to Hambantota from Matara..... bull shit!!!

    Muthu Wednesday, 06 March 2013 09:16 AM

    Loans, loans and loans. Good for voters who voted to be indebted to the world.

    Citizen Tuesday, 05 March 2013 08:52 AM

    The presidency for only Hambantota and surroundings? I thought people selected hm for SL..

    Chang Wednesday, 06 March 2013 05:29 AM

    China gives only Project loans .and both parties benefit.

    aaron Tuesday, 05 March 2013 12:00 AM

    do we need to lay a railtract?? we could have invested that loan on something useful,like agriculture or industrial stuffs. i gotta only one doubt how we gonna pay all da debits? beg? via DM Android App

    Amir Tuesday, 05 March 2013 09:10 AM

    The rejected loan in a different name. as usual all Sri Lankans will pay.

    wiren Wednesday, 06 March 2013 12:08 PM

    Welcome China, Sri Lanka's good friend for many centuries.

    Nodrog Tuesday, 05 March 2013 07:21 AM

    China is doing what India could have done all these years but didn't...so why show concern now?

    weha Tuesday, 05 March 2013 07:29 AM

    Thawa ganna thawa ganna.api inawane itin gewanna

    Silmiya Pura Tuesday, 05 March 2013 07:32 AM

    Sure this project will be benefit to china for their economic needs.


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