The deal gives a Chinese company majority shares in the port.
The Hambantota port was formally handed over to a China-led company earlier this month and Sri Lanka received its initial payment for the lease.
Following the signing of an agreement, the port operations was handed over to Hambantota International Port Group (HIPG) and Hambantota International Port Services (HIPS).
China Merchants Port Holdings Company Ltd. (CMPort) owns 85% and Sri Lanka Ports Authority (SLPA) owns 15% of the stake in Hambantota International Port Group Ltd. (HIPG), which will undertake the project identified to restructure the Hambantota Port development and transform it to be a commercially-viable national asset in collaboration with the SLPA with an envisaged investment of $794 million.
Hambantota International Port Services Ltd. (HIPS), which will own common user facilities, will be 58% owned by HIPG, and 42% by the SLPA.
With the transfer of the port to the new China-led company, Sri Lanka received around USD 293 million as the initial payment as part of the deal.
Under the 99-year lease agreement, CMPort will agree to invest an amount of up to US$ 1.12 billion into Hambantota Port and Hambantota port and marine-related activities. (Colombo Gazette)