In a move that may have wide ranging consequences the Sri Lankan government has officially handed over Hambantota’s southern sea port on a 99-year lease to China.
Two Chinese firms, namely Hambantota International Port Group (HIPG) and Hambantota International Port Services (HIPS) managed by the China Merchants Port Holdings Company (CMPort) and the Sri Lanka Ports Authority will own the port and the investment zone about it, officials said on Saturday.
Prime Minister Ranil Wickremesinghe during a visit to China in April had agreed to swap equity in infrastructure projects launched by president Mahinda Rajapaksa in his home district.
Last year, Former Sri Lankan Finance Minister Ravi Karunanayaka had said that the island nation owed China $8 billion.
“With this agreement, we’ve started to pay back the loans. Hambantota will be converted into a major port in the Indian Ocean,” Wickremesinghe said while addressing the handing over ceremony held in parliament.
“There will be an economic zone and industrialisation in the region which will lead to economic development and encourage tourism,” the prime minister said.
$300 million was received by Sri Lanka as the initial payment for the lease that the opposition had described as a sell out.
The move will be watched closely. From where it can encircle India Beijing already has control of the Gwadar port in Pakistan and placement in Maldives.
Colombo said warships won’t be allowed to dock in Hambantota and had played down New Delhi’s concerns.