Cabinet approves H'tota Port deal

Barsaba Taglieri
Luglio 25, 2017

Hambantota is a part of China's modern-day "Silk Route" across Asia and beyond.

China Merchant Port Holdings will hold 85% stake in the $794 million Hambantota International Port Group Services Co., that will essentially run the port and its terminals with the remaining 15% vested in the hands of the Sri Lanka Ports Authority, Reuters revealed.

The agency said that under the new deal China's role has been limited to running commercial operations while Sri Lanka will oversee the broader security.

According to the worldwide news agency press statement 'a second firm, Hambantota global Port Group Services Co, with a capital of $606 million, will be set up to oversee security operations, with the Sri Lankans holding a 50.7 percent stake and the Chinese 49.3 percent'.

"We told China that we can't allow the port for military use and that 100 percent responsibility of security matters should be with the Sri Lankan government.", Ports Minister Mahinda Samarasinghe said, Reuters reported. Sri Lankans took to the streets to protest over a fear of loss of land, and opposition politicians have claimed the scale of land transfer to the Chinese is a risk to national security. The port, close to the world's busiest shipping lanes, has been mired in controversy ever since state-run China Merchants Port Holdings, which built it for $1.5 billion, signed an agreement taking an 80 percent stake.

'China Merchants Port Holdings also agreed to reduce its stake in the joint venture after 10 years, to 65% the document said'. In May, Sri Lanka turned down a Chinese request to dock a submarine.

The call angered neighboring India, which considers Sri Lanka to be within its sphere of influence and has been suspicious of China's increasing interest in investing in the island's infrastructure, including its sea and air ports.

The document will be sent for a final approval to the Parliament, cabinet spokesman Dayasiri Jayasekara said.

"They emphasised that they wanted to maintain balanced relations with other countries".

The Sri Lankan cabinet on Tuesday cleared a revised agreement for the Chinese-built port of Hambantota in the south, Reuters reported.

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