Asia/Pacific News
Sri Lanka Again Turns to China to Develop Hambantota, but Critics Say its Being "Given Away" to Settle Debts
Malik Samarawickrema, Minister for Sri Lanka's Strategic Development and International Trade has said that the government has once again turned to China to help develop the port of Magampura in Hambantota, in an effort to minimise losses it has incurred through the struggling project, Sri Lankan media reports.
China is understood to have already provided the bulk of the $1.5 billion development costs to date, and while bunkering operations at the port were the only aspect not open to external investment, that turned out to be a short lived, and ultimately failed venture that resulted in a loss of almost $20 million for the government.
"The previous government has carried out these projects in a way that is totally unfavourable to the country. But we are trying to get help from these Chinese companies to bring these institutions back into a profit making state," said Samarawickrema.
Sri Lanka's Prime Minister is reported to have confirmed that the government signed an MoU with the Chinese company for the port's development, as well as that of Mattala International Airport, during a recent visit to China.
The move has attracted some criticism, with Vasudeva Nanayakkara, leader of the Leftist Front, having stated: "instead of paying the debts owed to China, the present government has formulated an agreement that is aimed at settling the debts by giving away these institutions outright to China."
Further, some have criticised the government for making the deal with a Chinese company, as it had spoken against the previous regime's relationship with China.
However, Samarawickrema has defended the government's move, explaining that the government is contracting a Chinese company, not the Chinese government itself - although he admits that the company in turn is owned by the Chinese government.
In March, Ship & Bunker reported that the Sri Lanka Ports Authority (SLPA) was the subject of questions regarding the port authority's call for tenders for the operation of the Hambantota marine oil and gas tank farm and bunkering facilities, which sources say ran for only two weeks ending March 10.
