Sri Lanka Hands Over Hambantota Port to China
Sri Lanka formally handed over the commercial activities in its main southern port to a Chinese Company on a 99-year lease, Finance Minister Mangala Samaraweera said.
The $1.1 billion commercial deal, signed in earlier this year, allows a state-run Chinese company to operate the port and about 15,000 acres nearby for an industrial zone. Sri Lanka government received $292 million on Saturday as a first tranche of the Hambantota Port joint venture. Ports Minister Mahinda Samarasinghe said the government would receive about $100 million in a month and another $585 million in six months.
Hambantota was launched in 2010, in vicinity to the main shipping route linking Asia to Europe, yet was incurring losses due the lack of commercial activity. Sri Lanka’s government claimed money from the deal will be directed to the recovery of losses and ease the return of foreign loans.
“This is the first step in realizing the true commercial value of the port after seven long years,” Samaraweera stated.
The initial plan to allow China to own 80 percent of the joint endeavor triggered voices of discontent, protests by trade unions, opposition groups; eventually resulting in the revision of the deal by the Sri Lankan government. The deal now entitles the Chinese firm to hold a full 70 percent stake.
Concerns over the military value of the port arise amidst the plan’s opposers, concerned that the Chinese navy could potentially use the port as a base.
“We are against this because it undermines our sovereignty,” opposition MP Namal Rajapaksa of the United People’s Freedom Alliance (UPFA) said in an interview.
“We have always considered Hambantota port as one of the biggest opportunities for our economy, given its strategic location,” he added, “the government is just giving it away.”
Demonstrators across the nation have gathered and rallied against the acclaimed loss of land since the launch of the deal.
Trade union had staged a strike against the deal as they fear the deal gives an advantage to China in the bunkering business because the port provides fuel to the ship at a key international shipping lane between Europe and Asia.
Sri Lanka’s government dismissed the concern of the port being used as a military base and gave assurance that the Chinese company is only allowed to operate commercial practice, thus the agreement would prove of profit to the country.