Sri Lanka, China sign $1.1 billion deal

COLOMBO: Sri Lank a on Saturday sealed a billion-dollar deal to let a Chinese state firm take over a loss-making port in a move that worries many, including India.

The long-delayed $1.1 billion sale of a 70% stake in Ham ban tot a port, which straddles the world’ s busiest east-west shipping route, was confirmed by Sri Lanka’s ports minister Mahinda Samarasinghe.

The government used tough laws against industrial action to stop workers going on strike this week to oppose the sale to China Merchants Port Holdings.

India is nervous about China’ s infrastructure moves into its traditional sphere of influence.

“We have addressed geo- political concerns ,” the minister said in Colombo .“China accepted that everything in this agreement will operate under Sri Lankan law.”

Negotiations over the deal were held up for months amid opposition from trade union sand political parties.

The minister said this week that several countries had raised fears about the sale. India and the United States are known to be concerned that China getting a foothold at the deep-sea port could give it a military naval advantage in the Indian Ocean.

Samara sing he said that Hambantota, 240 km south of Colombo, will not be a military base for any country.

China Merchants built and operates Sri Lanka’s only deepsea terminal in Colombo, which can accommodate the world’s largest container carriers. AFP