Chinese company pays last tranche of US$ 584 million for Hambantota port

Chinese company pays last tranche of US$ 584 million for Hambantota port

Colombo, June 20 ( The final tranche of US$ 584 million which China had to pay for taking the Hambantota Port on lease for 99 years was released on Wednesday by the China Merchant Port Holdings Limited (CM Port) on Wednesday.

The cheque for the said amount was handed over to the Chairman of Sri Lanka Ports Authority (SLPA), Dr.Parakrama Dissanayake, by the Chief Representative of China Merchant Group in Sri Lanka, Ray Ren in  the presence of senior port officials and representatives of CM Port.

This makes the single highest  ever Foreign Direct Investment (FDI) received by Sri  Lanka to date.

This third final tranche amountin to US$ 584,194,800 follows the first and second tranches released in December last year and January 2018. The amounts were US$ 292 million and US $ 97 million respectively.

With this payment CM Port fulfills the US $ 976 million investment value of the port in terms of the Concession Agreement.

CM Port has agreed to deposit a further sum of US$ 146 million to be utilized for port and marine related activities.

In view  of urgent need for viable and efficient operation of the Port of Hambantota, on the direction and leadership of the Minister of Ports and Shipping Mahinda Samarasinghe under the guidance of President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, the  Sri Lanka Ports Authority (SLPA)  and the Government of Sri Lanka entered into the Concession Agreement with China Merchant Port Holdings Limited of Hong Kong in July last year for management, operation and development of the Hambantota Port on a Public-Private Partnership model.

Hambantota port

On December 9, 2017, two Sri Lankan companies established under the concession agreement namely, Hambantota International Port Group (HIPG) and Hambantota International Port Services Co. (Pvt) Ltd. (HIPS) officially took over the Hambantota Port thereby making the concession agreement effective.

“CM Port is one of the most successful global companies in the ports sector, and their investment in the Port of Hambantota can be described as a credible vote of confidence in its potential as well as in the economy of Sri Lanka,” said Parakrama Dissanayake, Chairman SLPA.

The two companies established in Hambantota plan to further invest an additional US$ 400 million to US$ 600 million on phase I and II of the Hambantota Port. These investments will attract many other foreign investors to the country, making Sri Lanka a pivotal maritime and logistics centre.

In 2017, the port of Colombo was ranked as the 23rd largest Container Port and 13th best connected port in the world.

The SLPA also recorded a net profit of LKR 13.2 billion in 2017, as against a net profit of LKR 1 billion achieved in 2016.

Transhipment volumes in the port of Colombo during the first five months of 2018 as against 2017  increased by 19.2%, and the Jaya Container Terminal managed by SLPA recorded a transhipment growth of 21% during the aforesaid period.

(The featured image at the  top shows CM Port and Sri Lankan officials during the payment of US$ 584 million)