China withholds Hambantota Port deal’s final tranche of USD 585 mn to Lanka over dispute
Posted on June 10th, 2018

Courtesy wionews.com

 PTI Colombo, Sri Lanka Jun 10, 2018, 11.19 PM (IST)

China has withheld the Hambantota Port deal’s final tranche of USD 585 million to Sri Lanka due to Colombo’s objection over its plan to use a man-made island for entertainment purposes, a media report said here today.

In December last year, Sri Lanka handed over the control of the southern sea port of Hambantota to China on a 99-year lease for USD 1.12 billion, amid concern over Beijing’s efforts to expand influence in the region.

Opposition leaders have dubbed the deal as a sell out to China.


File photo of Hambantota Port. Photograph: (Others)

The SundayTimes reported that the last tranche of USD 585 million has been held back by China’s state-owned China Merchants Port Holdings which want the land to be used for entertainment purpose.

However the Sri Lanka Ports Authority insists that the facilities at Hambantota should only be used for marine and port-related activities and not for entertainment tourism purposes, the report said.

It quoted the Chinese firm as saying that the money would only be transferred after the issue is resolved.

The Hambantota port was a major Chinese-assisted infrastructure project in the home district of former president Mahinda Rajapaksa, whose nearly a decade-long rule was ended by President Maithripala Sirisena in 2015.

Rajapaksa’s administration had been criticised heavily for high commercial borrowings from China.

The other project in Hambantota funded by the Chinese, the Mattala Rajapaksa International Airport is already in trouble.

Dubbed as the world’s emptiest airport, its only flight operation -? the service of Fly Dubai — was halted this week.

The company cited commercial and flight security reasons for halting the service as birds had hit their planes often.

One Response to “China withholds Hambantota Port deal’s final tranche of USD 585 mn to Lanka over dispute”

  1. aloy Says:

    Instead of lamenting on spilt milk why not we try to make use of these assets on a systematic way. We need not bow down to dictates of the powerful countries with cash. I am sure we have enough local people who can run MRIA without making huge losses if they make a genuine effort. Sri Lankan Airline makes the largest number of flights to India. I understand that due to the changes made by the new board, there are a lot of passengers from India transiting via KIA. Why not make it more attractive for them to transit via MRIA also. Free transport could be offered to passengers going to places like Galle, Matara, Ratnapura etc. as an incentive to use Mattala istead of coming all the way to KIA.

    And also try to renegotiate the terms of Hambantota. Perhaps we could offer a lesser number of years for the money already paid and if that is not possible give it to Sri Lankan entities already operating successfully in Colombo. Reduce the import of luxury items like expensive cars and food items that can be produced locally and use that forex saved to pay back these loans. If the intension is known the people will tolerate.

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