Sri Lanka allays India's concerns renegotiates port deal with China

Hambantota Port Agreement To Be Signed Tomorrow PM

China Merchants Port Holdings will take an 85 percent stake in Hambantota International Port Group that will run the port and its terminals, with the rest held by Sri Lanka Ports Authority.

The strategic deal that may raise security concerns in India will be signed tomorrow between state-owned China Merchants Port Holdings (CMPort) and Sri Lanka Port Authority.

"We are giving the country a better deal without debt", Wickremesinghe told media.

"With these maritime infrastructure investments and other diverse investments such as the proposed worldwide maritime centre, Sri Lanka will be well positioned to play a strategic role in the one-belt-one-road initiative of China", Hu said. Now Sri Lanka is struggling to repay Beijing.

The port, overlooking the Indian Ocean, is expected to play a key role in China's Belt and Road initiative, which will link ports and roads between China and Europe. The money from the deal, officials say, will be used to repay part of the loan.

The initiative is being keenly watched by regional trade rivals, including India and Japan.

Minister Samarasinghe said the harbor construction to the current level was carried out through obtaining a commercial loan amounting to Rs. 183 billion.

Officials also made assurances that the port would not be used by the Chinese military.

Samarasinghe said the port, which is 240 kilometres (150 miles) south of Colombo, will not be a military base for any country.

The Hambantota port was built with Chinese loans in 2010 during Rajapaksa's term.

The Executive Vice President of CMG, Dr Jianhua, maintained 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 highlighting that the Hambantota project is the largest maritime communication project in Sri Lanka, to date.

The amended agreement gives the SLPA a 30 per cent stake in the port, in contrast to 20pc, which it was supposed to get earlier under the December 2016 Framework Agreement. The security of the port would be entirely under the control of the SLPA, the Defense Ministry and the Sri Lanka Navy where warships could land but only with the explicit permission of Sri Lanka.

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