Sri Lanka signs $1.1 bln China port deal

Sri Lanka signed a long delayed $1.1 billion deal on Saturday to lease its southern Hambantota port to China ignoring an appeal by opposition parties to debate the pact in parliament.

The deal was signed between the two state firms — Sri Lanka Ports Authority (SLPA) and China Merchants Port Holdings to handle the commercial operations of the Chinese-built port on a 99-year lease.

Chinese firm will hold 70 stake in a joint venture with SLPA to run the port, part of a plan to convert loans worth $6 billion that Sri Lanka owes China into equity.

“We thank China for arranging this investor to save us from the debt trap,” Port Minister Mahinda Samaraasinghe told the gathering in Colombo port where the deal was signed.

He said the Chinese firm will invest additional $600 million to make Hambantota port operational while $1.12 billion from the deal will be used for debt repayment.

Hu Jianhua, the executive vice president of the China Merchants Port said the port facilities belong to the citizens of Sri Lanka but will be a key part of China’s massive One Belt One Road initiative to build trade and transport links across Asia and beyond.

“With these maritime infra-structure investments, and other diverse investments such as the proposed international maritime centre, Sri Lanka will be well positioned to play a strategic role in the one-belt-one-road initiative of China,” Hu said. (RTRS)