G.L says Hambantota port could have been sustainable entity

Joint opposition member and former Foreign Minister, G L Peiris says if the deal on the Hambantota port was done the way former President Mahinda Rajapakse had intended, the port would have been a sustainable entity.

“What was proposed at the time is different from what is being done today. There is certainly no agreement to hand over 15000 hectares to a Chinese company. That was not contemplated at all. The agreement as structured at the time did not involve the wholesale leasing of the port. It was only leasing a terminal of the port,” he told the Times of India.

Answering questions on the huge debt that Rajapakse left behind, Peiris said, “Loans taken by this government is far in excess of what President Rajapakse had taken. There was something to show then – today there is nothing. The government has admitted that the money to be paid by China for the port ($1.4 billion) is not to be used for retiring this debt. So the Government argument of doing this (giving the land) to pay off the debt doesn’t stand. It will stay in an account in the central bank and it is to be used for things other than repayment of the debt. The debt remains.”

Peiris said the payment scheme as set out by the Sirisena Government is unsustatinable. “We are still committed to paying it back. In the proposed agreement, the Chinese company will not pay any money for the next 15 years, which means the Sri Lanka Ports Authority will receive no income. At the end of 15 years, Sri Lanka Ports Authority will get money from the Chinese company only if a dividend is declared.”

Therefore, he said, for a decade and a half there will be no income accruing to Sri Lanka from the Chinese company in Hambantota Port, but Sri Lanka will be obliged to continue to service the Chinese debt. “That means people of SL will have to be taxed more.”

Rajapakse’s deal, he said, was different. “By 2020, Hambantota port would be a viable commercial concern – we would have ensured all services at the port be paid for — investors were required to pay a minimum of $50000 for lease/rent per hectare. Then investors were required to bring in $1.1billion for the development of the port.” This, he said, would ensure continuing income for the period.
“Now,” he said, “we are depriving ourselves of the asset and the wherewithal to pay the debt. Also, the 15000 hectares don’t have to come out of the Hambantota district but could be carved out of neighbouring Monaragala district.” In addition, he said, “until the port reaches 50 percent capacity, Sri Lanka is prevented from developing another terminal with 100 km radius. None of these was part of the original deal.”

The security arrangements within the Hambantota port, the employment of people, cargo etc, would all be the responsibility of the Chinese company. “The company can employ who they want, they are taking the assets not the liabilities.”