Colombo wants to roll back port lease to China
Posted on November 29th, 2019
Courtesy The Straits Times
COLOMBO • Sri Lanka’s new government led by President Gotabaya Rajapaksa wants to undo the previous regime’s move to lease the southern port of Hambantota to a Chinese venture, citing national interest.
Former prime minister Ranil Wickremesinghe in 2017 changed the terms, saying it would be difficult to pay the loans taken to build the project.
He agreed to lease the port for 99 years to a venture led by China Merchants Port Holdings in return for US$1.1 billion (S$1.5 billion). That helped ease the Chinese part of the debt raised to build the port, Mr Wickremesinghe said in an interview last year.
“We would like them to give it back,” Mr Ajith Nivard Cabraal, a former central bank governor and an economic adviser to former prime minister Mahinda Rajapaksa, said in an interview at his home in a Colombo suburb.
“The ideal situation would be to go back to the status quo. We pay back the loan in due course in the way that we had originally agreed without any disturbance at all.”
The port is emblematic of the controversy dogging Chinese President Xi Jinping’s Belt and Road Initiative from Kenya to Myanmar, including accusations that the world’s second-largest economy is luring poor countries into debt traps.
In Sri Lanka, where the transaction to lease the port was opposed by Mr Gotabaya Rajapaksa’s party, Mr Mahinda Rajapaksa took Chinese loans during his 10-year rule as president to build the project in his home district.
“This is a sovereign agreement” and it is unlikely that it will be scrapped or altered in a big way, said Mr Smruti Pattanaik, a research fellow at the Institute for Defence Studies and Analyses in New Delhi.
An attempt to rework the transaction will help the new Sri Lankan government, led by Mr Gotabaya Rajapaksa and his brother Mahinda, showcase its drive to change contracts seen as hurting national security, a key campaign platform for Mr Gotabaya Rajapaksa, a former defence secretary.
“China-Sri Lanka cooperation, including the Hambantota port project, is built on the basis of equality and consultation,” China’s Foreign Ministry said in a faxed statement from its spokesman’s office.
“China looks forward to working with Sri Lanka to make Hambantota a new shipping hub in the Indian Ocean and developing the local economy.”
BLOOMBERG
November 29th, 2019 at 8:54 pm
It is now up to China to show some statesmanship and release Hambantota Port which they acquired under an unlawful land transfer through a traitorous regime.
Ranil’s stratagem was to make Sri Lanka a Failed State and slowly handover the controls to the US. It was with this intention that they robbed the Central Bank to pauperize the nation. It was with this intention that he compromised our agri trade and almost ruined it. Taxes and interest rates were increased ruining up and coming small business sector.
China should understand that a strong and neutral Sri Lanka is a better investment than a servile Sri Lanka open to big power rivalry.
November 30th, 2019 at 11:49 am
Ranil the traitor wanted to crash the country and sell all the assets for peanuts. We would have ended up like Greece if he had his way.