H’tota industrial zone will have same ownership structure as of port: Malik
The proposed Chinese industrial zone that will feed in business to the Hambantota port will have a similar ownership structure to that of the port and the discussions on the agreement are expected to finish by the end of this year, according to Development Strategies and International Trade Minister Malik Samarawickrama.
“Now we are having negotiations with the Chinese party regarding the terms, and I’m sure before the end of the year, those negotiations will be completed and there again that also will be a joint venture; 70 percent to Chinese and 30 percent to us,” Samarawickrama said last week at a post-budget seminar.
The Hambantota port was leased to China Merchant Port Holdings Limited for 99 years for US$ 1.12 billion, with China Merchant having a 70 percent effective shareholding in the port.
“We expect the joint venture company between China Merchant and SLPA to take over the port on the 8th of December. So, with that they will inject the first tranche, which is about US$ 430 million, and the balance will come 6 months later. As far as the port is concerned, everything is in place,” Samarawickrama said.
In order to make the port viable, a 15,000-acre investment zone was conceptualized in mid-2016.
Following protests in Hambantota over fears of state acquisition of civilian—especially agricultural—lands, Samarawickrama in late-2016 said that the industrial zone would consist of 95 percent state land from three to four surrounding districts.
He had also pledged that forest reserves would not be harmed in the process. Development of projects in Hambantota, such as the Mattala Airport and the Sooriyawewa Cricket Stadium, had taken place in the middle of elephant ranges. Says discussions on the agreement to finish end of this year US $ 1bn Chinese investment into synthetic rubber already pursued Proposals have been received for ventures within H’tota port land
Samarawickrama last week said that the land has mostly been identified.
“On the industrial estate site—as you all know the port cannot run by itself, it must have industrialization in that area—the special industrial zone has been set up. The land has been identified— at least most of it,” he said.
Samarawickrama added that while the investment zone would attract a lot of investor interest, one large investment has already been forwarded to the government.
“We have already got a very big Chinese company again, who has come over here and they’re looking at an investment of about US$ 1 billion to manufacture synthetic rubber. Our Director General of the Board of Investment visited them last week,” Samarawickrama said.
Meanwhile, he said some proposals have been received for ventures within the Hambantota Port land.
“We have received a proposal for a refinery, which is about a US$ 3 billion investment, and we have got a proposal for a cement plant, which is a US$ 125 million investment. People are coming forward with their proposals. These are all joint ventures with local partners.”