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H'tota deal not the best for SL: MR

10 January 2017 05:44 pm - 14     - {{hitsCtrl.values.hits}}

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While claiming that the agreement negotiated by his government with China to manage the Hambantota Port is the best deal yet, former president Mahinda Rajapaksa said today this government has failed to get the best deal for Sri Lanka.

Mr. Rajapaksa said he had no issue with China or any foreign investors but was concerned about what’s best for the country and getting the best deal for it.

In a statement explaining the plans of the Rajapaksa Government to develop the port and to repay the loan obtained, he said the government has chosen the least favourable bid.

“The previous agreement, that my government negotiated with the China Harbour Co and China Merchant Co to manage the Hambantota container terminal for 40 years, is the best deal yet. According to information, the government has chosen the least favourable bid despite the Ports Authority having recommended the other bidder,” he said.

He said the current bid has been accepted in a situation where the other company, the China Harbour Co., had put up a more favourable bid to lease the free port on a 65-35 equity sharing basis for 50 years with an upfront payment of 750 million USD.

Mr. Rajapaksa said the new government has made some unwise decisions by disregarding several profitable agreements made by his government.

“The management contract for the Hambantota container terminal entered into by my government with China Harbour Co and China Merchant Co was cancelled. Then, the Ports Authority had developed the Colombo East container terminal and upon its completion by 2016, this terminal would have produced a revenue of more than 100 million USD a year which the Ports Authority had earmarked to pay off the Hambantota loan until the latter generated sufficient income. The 'yahapalana' government halted the Colombo East terminal development,” he said.

He said he was against the leasing of the entire harbour for 99 years and giving the rights of a landlord over the industrial zone to a foreign private company.

"The industrial zone and the harbour should be controlled by the Ports Authority while harbour operations may be given on management contracts to the private sector. The Colombo port is run by the Ports Authority and two private operators. The Ports Authority has full control over the Colombo harbour as well as equity in the two privately run terminals. I believe this should be the approach to the Hambantota port as well,” he said.

Mr. Rajapaksa reiterated that the Hambantota Port made an operating profit of Rs.900 million in 2014 and Rs.1.2 billion in 2015.

“These are investments that last centuries and a new harbour cannot be expected to produce large profits in the first few years. Our plan was to break even within ten years,” he said.

Commenting on the Southern Industrial Zone, he said the total land area of all the Board of Investment economic zones in the country do not amount to 2,000 hectares and as such a 15,000 acre-zone in Hambantota will be disproportionate to the country’s economy.

He said the government should fill the free port with investments first before opening more zones.

“This is not an issue that can be resolved by baton-charging or tear gassing protesters or having them assaulted by thugs and remanded. There are real issues relating to the financial benefits that will accrue to the country from this deal, and issues of control and sovereignty over the free port and possible environmental issues that need to be addressed,” Mr. Rajapaksa said.

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  Comments - 14

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  • ANTON Wednesday, 11 January 2017 01:24 PM

    IF YOU AL BECAME THE PRESIDENTS OF USA, DEFINITELY YOU WOULD SELL THIS EARTH PLANET TO THE MARS.

    OMG Wednesday, 11 January 2017 01:41 PM

    These are investments that last centuries and a new harbour cannot be expected to produce large profits in the first few years. Our plan was to break even within ten years. WOW HOW EASY FOR HIM TO SAY. TILL 10 YEARS WHO IS GOING TO BURDEN THE LOSS? YOUR FAMILY OR THE PUBLIC TAX MONEY?

    OMG again Wednesday, 11 January 2017 01:44 PM

    if Colombo East container terminal project can produce a revenue of more than 100 million USD a year. Why didnt you make it on fast track and easy the cost of living for the public. Instead you put the country in to big loan mess.

    Marse Wednesday, 11 January 2017 02:17 PM

    Yes all the projects (deals) done under my Government was perfect and whatever done others are imperfect via DM Android App

    Leo Wednesday, 11 January 2017 06:11 AM

    Unfortunately your presidency was the worst deal for Sri Lanka yet. via DM Android App

    SHERIFF Wednesday, 11 January 2017 06:50 AM

    Why dont you let the President My3 will do what's good for the country because we trust him more, People in Sri lanka is fed up two faced style of management ( GOTA is coming GOTA is coming run go away) :)

    Reader Wednesday, 11 January 2017 07:13 AM

    Government must clarify and tell the public whether this the best deal out of the two. 40 year seems better than 99 year so an explanation is essential how financially and economically they stand. Getting $ 1.1 million now is not important as loan repayments are spread over 15 years. Lease period is critical for the country as we are tying down next few generations by 99 years when loan repayment is over 15 years only.

    rish Wednesday, 11 January 2017 05:07 PM

    Sirvery simple mathematics....all vehicle carriers are diverted to Hambanmtota....1.2B profit reduction in Colombo and 1.2B added to hambantota..other than that income is zero.................

    Reader Wednesday, 11 January 2017 05:56 PM

    Profits must come from year one but sufficient to repay the loan in 15 years.

    German Jacob Wednesday, 11 January 2017 09:56 AM

    This man is the main cause for the down fall of our country.

    TONY Tuesday, 10 January 2017 05:55 PM

    WHATS THE BEST DEAL FOR THE COUNTRY OR FOR YOUR FAMILY?

    TONY Tuesday, 10 January 2017 05:57 PM

    AFTER YOU, CHINA HAS REALLY THROTTLED US WITH NO ESCAPE

    Jans Tuesday, 10 January 2017 06:07 PM

    MR only your deals are genuine via DM Android App

    TJ Tuesday, 10 January 2017 06:09 PM

    you laid the foundation for this mess.


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