H'tota port officially handed over to China , receives $292mn

10 December 2017 05:44 am - 14     - {{hitsCtrl.values.hits}}

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Sri Lanka formally handed over commercial activities in its main southern port to a Chinese company on Saturday and received $292 million out of a $1.12 billion deal, Finance Minister Mangala Samaraweera said.

The deal, signed in July, will see China Merchants Port Holdings, handling the Chinese-built Hambantota port on a 99-year lease. The port is near the main shipping route from Asia to Europe and likely to play a major role in China’s “Belt and Road” initiative.

“Today we received $292 million as the first tranche of the Hambantota Port joint venture. This is but the first step in realising the true commercial value of the port after seven long years,” Samaraweera told the parliament.

The $1.5 billion port was launched in 2010, but was incurring losses due to lack of commercial activity.

Ports Minister Mahinda Samarasinghe has said the government will receive another 10 percent, or around $100 million, in a month and another $585 million in six months.

An initial plan to give the Chinese firm an 80 percent stake triggered protests by trade unions and opposition groups, forcing the government to make some revisions that limit China’s role to running commercial operations while retaining for Colombo oversight for broader security issues.

Both sides then agreed to redraw the deal and the Chinese firm will now hold 70-percent-stake in a joint venture with the state-run Sri Lanka Ports Authority (SLPA), part of a plan to convert $6 billion of loans that Sri Lanka owes China into equity.

Sri Lanka has said the Chinese firm will invest an additional $600 million to make Hambantota port operational and $1.12 billion from the deal will be used for debt repayment.

Government and diplomatic sources told Reuters that the United States, India and Japan had also raised concerns that China might use the port as a naval base.

India is in advanced talks with Sri Lanka to operate an airport near Hambantota port.(Reuters)

  Comments - 14

  • JeffK Sunday, 10 December 2017 10:45 AM

    If Wise men ruled this country we would have been the shipping hub in the Indian ocean and we would have at-least 3 ports that are owned by 100% by the Sri Lankan government.

    SAM SPARROW Sunday, 10 December 2017 02:09 PM

    Wise men could make decisions by selling or renting out of loss making sectors too.

    umen Sunday, 10 December 2017 04:22 PM

    should have sold whole Sri Lanka instead selling one by one

    Leo Sunday, 10 December 2017 05:54 PM

    @Sparrow we have been selling and renting everything we got since 1977. Are we at a good position now?

    ceylon Sunday, 10 December 2017 12:20 PM

    ownership is nothing important.lanka own airlinehundreds of billions lost.busrailwayoiland all own are trillions lost from 1948. via DM Android App

    Ayyo Sunday, 10 December 2017 12:33 PM

    Pea nuts for a gold mine! Ayyo !!

    Saranga Sunday, 10 December 2017 01:53 PM

    Like what? Same like all other SOE's in SL? Bloated and unionised?

    Kumar Sunday, 10 December 2017 12:59 PM

    Ideally we should own the port 100% as it is ours. As things are Chinese takeover can be reluctantly acceptable however the Indians eyeing for the Hambantota Airport is to spy on the Chinese and they would have so many Master plans to wreck the whole thing.

    AUSLANKA Sunday, 10 December 2017 06:02 PM

    Although Asset sales is not an ideal scenario for a country, given the situation of existence of corrupt politicians and unions backed inefficient labor force in the country, this sale should bring positives rather than negatives for the country.

    Sahan Sunday, 10 December 2017 06:07 PM

    At least someone initiated to built this!!!

    super Sunday, 10 December 2017 06:07 PM

    it would have bben better to lease to any companies from Western countries. handing over to china, you are inviting trouble.

    Shan Sunday, 10 December 2017 07:56 PM

    Its paying back Loans that Rajapaksa blunded.

    ceylon Sunday, 10 December 2017 08:58 PM

    Government cant run even a tea shop.better give to some one who can do it. via DM Android App

    Diogenes Sunday, 10 December 2017 09:21 PM

    $292 million..New Toyota land cruisers for all members of parliament then?.... What wiil happen when world war 3 starts and there is a Chinese aircraft carrier sat in the port? Bye bye Sri Lanka in a blinding flash.


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