China to develop Sri Lanka’s deep sea port and airport
Prime Minister Dinesh Gunawardena holds talks with his Chinese counterpart; Beijing is the island nation’s biggest bilateral creditor and will ‘assist’ Colombo’s restructuring of external debt
Sri Lanka’s Prime Minister said on Wednesday that China has pledged to develop the island nation’s strategic deep sea port and the capital’s airport after talks with his counterpart in Beijing.
Prime Minister Dinesh Gunawardena said China — the island’s biggest bilateral creditor — would “assist” Sri Lanka’s restructuring of external debt, a key condition to maintaining a $2.9 billion IMF bailout.
Beijing’s position on debt restructuring has not been made public, but Sri Lankan officials have said China was reluctant to take a haircut on its loans but
Sri Lanka Prime Minister Dinesh Gunawardena meets Chinese President Xi Jinping in Beijing on Wednesday.
could extend the tenure and adjust interest rates.
Sri Lanka in 2022 ran out of foreign exchange to finance essential imports and declared a sovereign default on its $46 billion foreign debt. Months of protests forced thenPresident
Gotabaya Rajapaksa out of office.
Mr. Gunawardena’s office said Premier Li Qiang had promised China would “assist Sri Lanka’s debt restructuring process continuously and help Sri Lanka to develop its economy”.
Mr. Gunawardena said Beijing had offered “assistance to develop” Colombo International Airport and Hambantota port, the statement added, without giving further details.
Japanese project halted
A Japanesefunded expansion of Colombo airport had been on hold since Sri Lanka’s sovereign debt default.
The southern sea port of Hambantota was handed to a Chinese stateowned company in 2017 on a 99year lease for $1.12 billion.
India and the U.S. are both concerned that a Chinese foothold at Hambantota, on the island’s southern coast, could boost its naval advantage in the Indian Ocean.