JO asks President to scuttle Hambantota port deal with Chinese company
Posted on January 6th, 2017

Courtesy Adaderana

January 4, 2017  09:44 am
Eight Members of the Sri Lankan parliament belonging to the Pro-Mahinda Rajapaksa Joint Opposition have written to President Maithripala Sirisena appealing to him to scuttle the Public Private Partnership (PPP) Framework Agreement signed between the government and the China Merchant Ports Holding Company on the management of the Hambantota port, the NIE reported.

The MPs, led by Dinesh Gunawardena, pointed out loopholes, infirmities and mysteries in the agreement, which had replaced a more favourable one signed in September 2014 under the Rajapaksa Presidency.

Tracing the history of the agreements on the construction of the port, the MPs said that in September 2014, the Sri Lanka Ports Authority (SLPA), had entered into an agreement with the China Merchant Holdings (International) Company Ltd and the China Harbour Engineering Company Ltd, to lease the Hambantota Port (Phase II) on a Supply, Operate and Transfer (SOT) basis for 35 years. But this agreement was subsequently nullified and the China Harbour Engineering Company Ltd  and China Merchant Ports Holding Company Ltd, tendered separate proposals.

But the criteria for their selection were not defined. The China Harbour Engineering Company Ltd proposed an initial payment of approximately US$ 730 million for a 50-year lease period, during which, a payment structure similar to a royalty was proposed, which made the value of this proposal US$ 1.5 billion.

This was reported as the option preferred by the SLPA, as it would have benefitted it and the country.

But the proposal selected was that of the China Merchant Ports Holding Company for a one-time payment of US$ 1.08 billion, and a 99 year lease, extendable for a further 99 years.

The question arises as to why China Merchant Ports Holding Company was selected, and who selected it,” the Joint Opposition pointed out.

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