Sri Lanka to sell 80 percent of southern Hambantota port to Chinese firm
Sri 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.
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 oil-rich 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.
President Maithripala Sirisena suspended most of the Chinese infrastructure projects in Sri Lanka, including a $1.4-billion luxury property deal, allegedly because the proper procedure had not been followed, or costs had been inflated under his predecessor.
However, faced with a debt and balance-of-payments crisis, the new government eventually allowed all the projects to go ahead.
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why sell it please develop it with 4 BOT coal fueled power stations 3 of 3x300Mw like the Auckland Harbour and Air Port in New Zealand which will save over billion rupees per day
Here we go. Selling furniture to pay the debt.
So where is this paradise this Prime minister and President promised.
Mr.Ranjith , selling the furniture to pay debt? Hey even there is no shelter to keep these furnitures . Did u think that. as mahindas gov swallowed most of them to these Chinese firms. So its not wonder selling these furnitures to decorate.
Previous gov sold houses without furnished.
Present gov is selling houses with fully furnished. Oh what a governing.
BMW. Mercedes . Honda and the salaries of so called Executives working as Junior clerks has to be paid’ Now because no bank of the world lend money to Sri Lanka due to its poor credit record only way is to sell the asserts.
After that when the assets are run out we have to sell people as selves to ( may be your sons and daughters) to Chinese to pay for the debts,
The moral of the story is you cannot get anything for nothing.
You cannot blame MR or this goverment for selling these assets like this. They have to do this to keep you out of starvation.
What will you do if you are in debts to a bank ( caused by having big weddings and parties. You have to sell the furniture to cover the debts.
But there is a thing we can do to over come all these problems. We play cricket .
The whole Idea of developing the Hambantota harbor was because it is the Silk Road. So why sell it to the Chinese . If they can make use of it and make money why not lease it to them. Or even better run it our selves. The bottom line is these jokers do not want to admit that this project can be made profitable but Just because the glory will go to MR.
Mr S Fernando. Run the service our self. You are joking aren’t you. When you look at the bus service, Train Service, Sri Lanken airlines and banks. how can you say that.
If we don’t sell this how can we feed you idling mouths. We have to pay the loans etc. So we have no options.
The Hambantota Harbour was built with Chinese money because it lies on the Maritime Silk Route being developed by the Chinese.
Well, that appeared to be a good idea. But the Harbour remains largely unused for many years.
What’s happening to the Maritime Silk Route? Have the Chinese dumped this idea?
If they are pursuing and implementing the Maritime Silk Route, there should be at least a few ships travelling on this route, calling-in at Hambantota. But, this has not happened.
Did the Chinese take us for a ride and say “Can you build a Harbour in Hambantota which lies in the Silk Route which we are in the process of developing. We will give you the money at 12% interest”!
On a more serious note, if the position of the Harbour on the Silk Route was a major economic driver for the development of the Harbour, it has apparently failed because the Silk Route has not been developed or the users of the Silk Route are ignoring Hambantota.
Former Minister Prof G L Peiris has launched a new political party by the name of ‘Sri Lanka Podu Jana Peramuna’.
As the leader is a Law Professor, this party will run the country on proper law.