China Gets Control over Sri Lanka’s Hambantota Port
- Business & Finance
Sri Lanka has handed over Hambantota Port for operation to China under a 99-year lease deal.
On December 9, the joint venture of China Merchants Port Holdings (CMPort) and the Sri Lanka Ports Authority (SLPA) started operations, according to China’s State Council.
The development of the port, strategically located to connect the Middle East and East Asia, is expected to benefit China, Sri Lanka and other countries as well.
The investment was unveiled on July 25 as part of the concession deal terms agreed between CMPort, SLPA, the Government of the Democratic Socialist Republic of Sri Lanka (GOSL), Hambantota International Port Group (HIPG) and Hambantota International Port Services Company (HIPS).
Under the deal, CMPort obliged to invest USD 1.12 million for an 85 percent stake in the port.
By developing the port, the two parties intend to make it an international shipping hub linking South Asia with Africa. The port will also be connected with the Logistics and Industrial Zone in Hambantota.
With its position between Africa and the Middle East on one side and Southeast Asia on the other, Hambantota is in the middle of important energy supply lines in the Indian Ocean. What is more, Hambantota is said to be of strategic importance to China’s 21st Century Maritime Silk Road.
“The agreement for Hambantota could be seen as an example for further cooperation with countries in South Asia,” Yi Xianliang, Chinese Ambassador to Sri Lanka, commented.
“Hambantota Port will make a strong impact in South Asia and I think it will, beyond South Asia in the Middle East as well as the African continent,” Parakrama Dissanayake, President of Sri Lanka Ports Authority, said.