By Chandeepa Wettasinghe
The private sector last week expressed concerns over the government’s ‘iron curtain’ with regard to the Hambantota port sale agreement and called for more transparency and the involvement of local businesses in the venture.
“We have not had much information about the basis of this transaction. We’re asking for more information from the government. The way it has gone on, there’s more room for it to be discussed in the public space,” Ceylon Chamber of Commerce (CCC) Chairman Samantha Ranatunga said.
He was speaking during a seminar held at the CCC auditorium on the opportunities of the Hambantota port and Kra Canal in Thailand, organised by the Shippers’ Academy Colombo.
His remarks were surprising, given that the CCC—the country’s apex trade chamber—has usually had more access to information than the majority of the voting public on the government’s negotiations with foreign parties.
Other experts also voiced concerns similar to that of Ranatunga.
“I’m not able to comment in detail on the particular due diligence on the port, firstly because the information is not available. The government is keeping this under wraps,” Strategic Enterprise Management Agency (SEMA) Director Rohan Abeywickrema, who is also a shipper, said.
Shippers’ Academy Colombo CEO Rohan Masakorala said that what China intends to do with the port is also a concern.“China is going to bring US $ 6 billion in investments but into what industries? Are they bringing some industries here for a reason that they don’t want to tell us? Or are they bringing industries here to service India and the subcontinent?” he questioned.
The current government came to power promising good governance and transparency.
Instead of going for an international tender as it should have done when seeking foreign partners for projects of this magnitude, the government had directly approached the Chinese government in finding a strategic partner for the Hambantota port.
The messages that have come from both China and Sri Lanka on the deal have been inconsistent, with the Chinese ambassador saying that Sri Lanka has the power to dictate the terms of the agreement, while Sri Lankan ministers saying that China had made two bids, from which the Sri Lankan government has to choose from.
The government is now said to have amended the terms of the agreement, requiring China Merchant Port Holdings, which will be owning 80 percent of shares in the Hambantota port for US $ 1.12 billion, to divest 20 percent of the port shares in the next 10 years to Sri Lankan entities.
“Let two local companies partner in the project,” Hellman Worldwide Logistics Sri Lanka Managing Director Tania Polonnowita Wettimuny said, after noting that the local private sector has failed to engage with the government on the project during its inception.
Abeywickrema said that the Hambantota port is not a viable trading port unless global shipping lines could be persuaded to use it as a regional hub.
“Hambantota has no strategic viability. It is strategic for military purposes,” he said.
He noted that some hope is there for it to become an industrial port, where large quantities of raw material could be imported and intermediate and finished goods could be exported in smaller quantities.
However, he said that there is no infrastructure or utilities available in Hambantota, which the government would have to invest heavily on. The country has been experiencing problems with utilities such as power and water due to weather anomalies and poor planning.
Other experts present at the seminar also expressed similar sentiments.
A government to government agreement between China and Sri Lanka linked to the Hambantota port agreement calls for the setting up of three industrial zones totalling to 15,000 acres. The land is to be given to China for industrial development.
China has refused to partner in the port without the industrial zone citing that the port is unviable without industries.
C&S Development Co. Ltd Managing Director Professor Prianka Seneviratne said that it is yet to be determined how Sri Lankan industrialists could benefit from the arrangement.
He also raised questions over China’s military plans for Hambantota.
“I believe that the Chinese have a very strategic military plan because they have no bases between here and East China Sea. China has the world’s fastest growing army, air force and navy but no bases around the world to service its aircraft and ships like the US. China’s intentions could be more military oriented,” he said.
Masakorala said that such intentions are natural.
“When you’re becoming the world’ second largest superpower, military inspirations are there. But I think that it’s not only military interests they have in Hambantota,” he said.
The Sri Lankan government has repeatedly attempted to reassure the public that there will be no Chinese military operations in Hambantota. Meanwhile, Central Bank Monetary Board Member Nihal Fonseka said that the government’s idea is to address the country’s immediate macroeconomic issues such as public debt and reserves by attracting Chinese investments.
“So we may not get the best deal for the port, but the best deal for the country,” he said.
Amidst legal battles and public protests, the signing of the agreements for the Hambantota port and the industrial zones has been delayed from their initial timeline in January.
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