Chinese firm to get 80 percent of Hambantota port

9d2ab82a-9ca9-4673-aeca-89275a8faba5_16x9_788x442Sri Lanka will sell to a Chinese company 80 percent of a $1.5-billion port in its south, where China has also been offered an investment zone, in a bid to cut the country’s debt burden, Finance Minister Ravi Karunanayake said, according to the Reuters news agency.

The move follows an offer made by Prime Minister Ranil Wickremesinghe during a visit to China in April, to swap equity in Sri Lankan infrastructure projects against some of the $8 billion in debt the Indian Ocean island owes to China.

The Hambantota port was built with the help of Chinese loans and contractors in 2010 under former leader Mahinda Rajapaksa, as part of efforts to boost development of infrastructure after the conclusion of a 26-year-long civil war in 2009.

But the port, and a nearby airport, also Chinese-financed, had been seen as a white elephant because it was not financially viable, the current government has said.

“For somebody like the Chinese, it is the silk route transit point,” Karunanayake told a meeting of the country’s Foreign Correspondents Association late on Thursday.

China’s interest in the port is seen as part of its ambitions to build a “Maritime Silk Route” to the Middle East and onwards to Europe.

That makes some countries, including India and the United States, nervous, with Sri Lanka sitting near shipping lanes through which much of the world’s trade passes en route to China and Japan.

“The value will be more than $1 billion and the deal will be signed around the second week of November,”Karunanayake said, adding that a Chinese port operator would get 80 percent of the port stake. He declined to identify the company involved.

“The money from the deal will be used to repay expensive foreign loans,”Karunanayake said, adding that the government was also in final talks over a 15,000-acre (6,100-hectare) investment zone near the port.

The investment zone deal would be signed as “soon as possible”, Karunanayake said.

3 COMMENTS

  1. We,Sri Lankan want that an investment for ours national Economic Development by China capital market and their funding. We cannot ignored fact our nation has come turning point development of National sustsnibility of coming years.

    That is essential for path of development by China expansion of Trade route with other countries. We having advantages for room of expanding Trade and Investment become essential part development .

    The China has invested US $ 42 Billon dollars for Indian several projects. And Pakistan got US $ 46 Billions of dollars from China. Recently Bangladeshi got nearly Us $ 20 Billions Dollars for many propose projects by China. Why not that WE!

    Total Chinese investment of south Asian Counties more than US $ 111 Billions of dollars.

    Needless to say China is driving force of world Economy and Second largest Economy in the World. As well as largest Foreign Investments by Chinese capital ..Our Hambataota Port development projects has undertaken by Chinese is advantage for us time being.

    We must follow the path and road of development of their irrespective of political differences of Major Political Parties and metholodlgy of governances are immaterial to us.

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