Colombo, July 29 (newsin.asia): Sri Lanka and China on Saturday signed an amended agreement on further building and running the controversial Hambantota port in South Sri Lanka.
While Sri Lanka’s Ports Minister Mahinda Samarasinghe hailed the agreement as one which would help Sri Lanka financially, the Executive Vice President of the partner company China Merchant Group (CMG), Dr.Hu Jianhua, said that the Hambantota port built with Chinese expertise will be a significant part of China’s One Belt OneRoad (OBOR) global communications project.
The deal was signed here by the Sri Lanka Ports Authority (SLPA) and the China Merchant Port Holdings Company (CMPort) in the presence of the Sri Lankan Ports Minister Samarasinghe, Finance Minister Mangala Samaraweera, and Senior Minister of Special Projects, Dr. Sarath Amunugama.
Speaking on the occasion, Ports Minister Samarasinghe explained the improvements made in the amended agreement in relation to the earlier agreements.
The amended agreement secures for the Hambantota port, US$ 1.12 billion in upfront payment from the Chinese partner CMPort, which will enable the SLPA and Sri Lanka to meet their debt repayment obligations.
It also gives the SLPA a 30% stake in the port, in contrast to 20% which was earmarked for it earlier under the December 2016 Framework Agreement. CMPort will get 70% stake and not 80% as granted earlier.
Furthermore, the SLPA would get royalty and dividends. The security of the port would be entirely under the control of the SLPA. Warships could call at the port but only with the express permission of the SLPA and its security committee which will include the Defense Ministry and the Sri Lanka Navy.
Samarasinghe said that as per President Maithripala Sirisena’s suggestion, the amended agreement was placed on the table of parliament for discussion on Friday, but it could not be debated because of a ruckus created by the Opposition.
However, the agreement, as signed on Saturday would be presented to parliament again, because some might charge that it is different from the one presented on Friday, the Minister said.
He also pointed out that the agreement is not cast in stone for all time and can be amended at any time with the consent of both the parties.
Samarasinghe thanks the Chinese Ambassador for seeing the deal through, and invited China to continue to invest in Sri Lanka’s industrial growth.
Part of OBOR
The Executive Vice President of the China Merchant Group (CMG), Dr.Hu Jianhua, said that the signing of the agreement is “very significant” as it marks the 60th.year of the establishment of diplomatic relations between China and Sri Lanka.
Hu noted that the Hambantota project is the largest maritime communication project in Sri Lanka, to date. The bold decision to build the port was taken in 2009 when the world was going through an economic crisis. When fully functional, the port will contribute significantly to the economic development of Sri Lanka. It will also be a major part of China’s One Belt One Road (OBOR) global communication project.
Hu said that China would bring to the port its established expertise in running ports successfully, just as it did in the case of the Colombo Port’s International Container Terminals. Because of the Chinese built and run terminal the Colombo Port is one of the 20 top ports in the world, he added.
Hu said that CMPort is not oblivious to the needs of the community around Hambantota port. As part of its Corporate Social Responsibility, the company will have agricultural and health projects in the neighborhood of the port.
Finance Minister Mangala Samaraweera said that with the development of the Hambantota port, other districts of southern Sri Lanka will also grow and that economic growth will not be restricted to Colombo as has been the case so far.
However, a discordant note was struck by the Marxist and nationalist Janatha Vimukthi Peramuna (JVP), whose leader, Anura Kumara Dissanayake, said that the JVP will ask workers in the SLPA to reject the agreement. He said that bunkering should have been kept exclusively with the SLPA as it is a money spinner.
Former Ports Minister Arjuna Ranatunga who has been opposed to the deal, wanting a 60% stake for the SLPA and not 80% or 70%, did not attend the ceremony. Foreign Minister Ravi Karunanayake, who is at odds with the government on the Central Bank bond scam, was also conspicuously absent
Located near the main shipping route from Asia to Europe, the Hambantota port has been mired in controversy since CMPort, which built it for US$1.4 billion, signed an agreement in 2016, taking an 80 per cent stake.
The pact signed last year sparked widespread public anger as CMPort was to get 15,000 acres on lease for 99 years to develop an industrial zone next door. India raised fears about Chinese naval vessels using the port.
To help ease these concerns, Sri Lanka’s cabinet approved earlier this week a revised deal to cut the Chinese firm’s stake to 70 percent and assured that the port would not be used for military purposes.
The revised deal provides for the formation of two companies to split the operations of the port. Sri Lanka will have a major stake in the firm dealing with security, while China will run the other company that will be in charge of business.
(The featured picture at the top shows Sri Lanka Ports Authority Chairman Parakrama Dissanayake and Executive Vice Chairman of CMPort Dr.Bai Jingtao, exchanging signed agreement copies)