Lanka disallows entertainment island near Hambantota Port

Sri Lanka has turned down a proposal by China Merchant Port Holdings Ltd (CMPort) to use a fouracre artificial island around the Hambantota Port for entertainment projects, Ports and Shipping Minister Mahinda Samarasinghe said.

He said the proposal was ruled out on the grounds that the original agreement had stated that the island could be used only for marine, port services and commercial services and could not be used for military exercis- es or entertainment.

"We explained that none of the clauses can be breached. This was accepted by the Chinese partners," he said. The minister said releasing the final tranche of US$ 584 million was delayed until this dispute was resolved.

The Sunday Times on June 10, exclusively reported that the Chinese company involved in the Hambantota Port project had held back the final tranche of the payments due to a dispute involving infrastructure facilities including the artificial entertainment zone.

Mr. Samarasinghe said the Navy would remain within the Port area and would not move out, quashing speculation that the Navy would be asked to vacate the port.

He said the Government was expecting an additional investment of more than US$ 400 million within the next three years for the expansion of the port project and for the industrial zone within the port city.

The final tranche of US$ 584 million was deposited in Sri Lanka's foreign reserves.

Last year, 15,000 ships used the Hambantota port for transshipment and in the first quarter the number had doubled to 35,000, the Minister said. He said they expected the number to triple by the end of the year.

With foreign reserves coming in, the Port Authority would be able to pay back its loans in the next three years.