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HAMBANTOTA PORT TO BE DEVELOPED UNDER JV WITH CHINA MERCHANTS
December 12, 2016

Sri Lanka’s government has entered into an agreement with China Merchants Port Holdings to develop Hambantota Port under a public-private partnership.

 

Under the agreement, the port will be converted into a joint venture between the Chinese state-owned company, which will hold an 80% share, and the Sri Lanka Ports Authority, which will hold 20%.

 

According to Malik Samarawickrema, Sri Lanka’s minister of development strategies and international trade, the transaction is not an attempt to sell the port to a foreign country but is aimed at restructuring it so as to achieve economic growth.

 

“Accordingly the objective of the government is to make the Hambantota Port an income-generating enterprise retaining its ownership and leasing it on a 99-year lease agreement,” said Samarawickrema in a statement. “Another objective is to convert it from the present position of a white elephant to a prime commercial centre of the economy. The target of the present government is to make this port a centre of active economic operations by converting it as a hub connecting the East and the West and as an entry point into the Sri Lankan economy.”

 

The government has already borrowed more than Rs150 billion (US$1 billion) from China to build Hambantota Port, according to Samarawickrema.

 

China Merchants Port Holdings and the SLPA also hold a joint venture in the Port of Colombo’s Colombo International Container Terminals Ltd., with China Merchants holding 85% and the SLPA 15%.