{"id":151290,"date":"2025-08-09T15:40:03","date_gmt":"2025-08-09T22:40:03","guid":{"rendered":"https:\/\/www.lankaweb.com\/news\/items\/?p=151290"},"modified":"2025-08-09T15:40:03","modified_gmt":"2025-08-09T22:40:03","slug":"the-truth-about-hambantota-port-debunking-the-china-debt-trap-narrative","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2025\/08\/09\/the-truth-about-hambantota-port-debunking-the-china-debt-trap-narrative\/","title":{"rendered":"The Truth about Hambantota Port: Debunking the China \u2018Debt Trap\u2019 Narrative"},"content":{"rendered":"

Shenali D Waduge<\/strong><\/em><\/span><\/h2>\n\n\n

Hambantota Port has been wrongly portrayed as a symbol of China\u2019s debt trap diplomacy.\u201d In truth, it was a strategic infrastructure investment, misrepresented by local and foreign actors with geopolitical agendas. Here are the facts.<\/strong><\/p>\n\n\n\n

Hambantota Port: A Factual Q&A<\/strong><\/strong><\/p>\n\n\n\n

Historical Maritime Significance<\/strong><\/strong><\/p>\n\n\n\n

\u00b7      The name Hambantota\u201d<\/strong> is believed to derive from Sampan-thota,\u201d<\/strong> meaning port of sampans<\/em>\u2014for small trading boats historically used by Chinese and Southeast Asian<\/strong> maritime traders.<\/strong><\/p>\n\n\n\n

\u00b7      The area has been a long-standing maritime hub<\/strong>, with active trade links predating European colonial rule and extending across the Indian Ocean trade routes.<\/strong><\/p>\n\n\n\n

Origins of the Project<\/strong><\/strong><\/p>\n\n\n\n

\u00b7      Hambantota was a long-held dream of the southern region.<\/strong><\/p>\n\n\n\n

\u00b7      The project was championed by President Mahinda Rajapaksa and formally initiated in 2007, aligning with his broader vision for national infrastructure development.<\/strong><\/p>\n\n\n\n

\u00b7      India was offered the project first in 2005 but declined.<\/strong><\/p>\n\n\n\n

What is the strategic value of Hambantota Port?<\/strong><\/strong><\/p>\n\n\n\n

\u00b7       Located just 10 nautical miles from a major east-west shipping lane traversed by over 31,000 ships annually.<\/strong><\/p>\n\n\n\n

\u00b7       Designed to complement Colombo Port, focusing on:<\/strong><\/p>\n\n\n\n

o   Roll-on\/Roll-off (Ro-Ro) vehicle transshipment.<\/strong><\/p>\n\n\n\n

o   Bunkering and energy services.<\/strong><\/p>\n\n\n\n

o   Bulk and break-bulk cargo.<\/strong><\/p>\n\n\n\n

Why was it initially called a failure?<\/strong><\/strong><\/p>\n\n\n\n

\u00b7       Funded by China\u2019s Exim Bank (around 6.3%) <\/strong><\/p>\n\n\n\n

\u00b7       Lack of a commercial business strategy.<\/strong><\/p>\n\n\n\n

\u00b7       The broader “troika” vision of integrating port, airport, and industrial zone remained unrealized.<\/strong><\/p>\n\n\n\n

Was the lease to China a debt trap?<\/strong><\/strong><\/p>\n\n\n\n

No. <\/strong><\/strong><\/p>\n\n\n\n

The lease was not a debt-for-equity swap but a commercial lease agreement. It was initiated by the Sri Lankan government\u2014not China\u2014as a way to raise $1.12 billion in cash to service other debts. <\/strong><\/p>\n\n\n\n

The port remains under Sri Lankan sovereignty, with the Navy in charge of security. China\u2019s role is purely commercial, conducted through China Merchants Port Holdings<\/strong><\/p>\n\n\n\n

Key facts debunk the myth:<\/strong><\/strong><\/p>\n\n\n\n

\u00b7      The lease was proposed by Sri Lanka\u2014not China.<\/strong><\/p>\n\n\n\n

\u00b7      Lease yielded $1.12 billion in cash, used to bolster foreign reserves and pay other international debt.<\/strong><\/p>\n\n\n\n

\u00b7      The deal was not a debt-for-equity swap.<\/strong><\/p>\n\n\n\n

\u00b7      Sri Lanka retains full sovereignty; the Sri Lanka Navy maintains control of port security<\/strong><\/p>\n\n\n\n

\u00b7      It is a commercial port only.<\/strong><\/p>\n\n\n\n

What are the port’s achievements post-lease?<\/strong><\/strong><\/p>\n\n\n\n

Under China Merchants Port Holdings (CMPort), Hambantota has:<\/strong><\/p>\n\n\n\n

\u00b7      Specialized in Ro-Ro, bulk cargo, and bunkering.<\/strong><\/p>\n\n\n\n

\u00b7      Attracted industrial investment, reviving the “troika” model.<\/strong><\/p>\n\n\n\n

\u00b7      Achieved operational profitability.<\/strong><\/p>\n\n\n\n

\u00b7      Created thousands of jobs locally.<\/strong><\/p>\n\n\n\n

Hambantota Port \u2013 Key Operational Statistics (2023\u2013early 2024)<\/strong><\/strong><\/p>\n\n\n\n

1. Vehicle Transshipment (Roll-on\/Roll-off or Ro-Ro)<\/strong><\/strong><\/p>\n\n\n\n

\u00b7      2023 Total Vehicles Handled<\/strong>: <\/strong>Over 730,000 units<\/strong><\/strong><\/p>\n\n\n\n

\u00b7      Hambantota ranked among the<\/strong> <\/strong>top 10 vehicle transshipment hubs in Asia<\/strong>.<\/strong><\/p>\n\n\n\n

\u00b7      Major clients:<\/strong> <\/strong>Kia, Hyundai, Toyota, Tata, Mahindra, Nissan<\/strong>, <\/strong>Volkswagen<\/strong>.<\/strong><\/p>\n\n\n\n

2. Container Throughput (TEUs)<\/strong><\/strong><\/p>\n\n\n\n

\u00b7       Though still growing, Hambantota handled over 150,000 TEUs<\/strong> in 2023 (a 35% year-on-year increase).<\/strong><\/p>\n\n\n\n

\u00b7       Projected to cross 300,000 TEUs by end-2025<\/strong> with new capacity investments.<\/strong><\/p>\n\n\n\n

3. Bulk Cargo<\/strong><\/strong><\/p>\n\n\n\n

\u00b7       Growth in imports & transshipment of cement, fertilizer, clinker<\/strong>, and petroleum<\/strong> products.<\/strong><\/p>\n\n\n\n

\u00b7       Handles LPG, dry bulk (coal, clinker), and liquid cargo.<\/strong><\/p>\n\n\n\n

4. Infrastructure<\/strong><\/strong><\/p>\n\n\n\n

\u00b7       11 berths<\/strong>, including:<\/strong><\/p>\n\n\n\n

o   Ro-Ro terminals<\/strong><\/p>\n\n\n\n

o   General cargo terminals<\/strong><\/p>\n\n\n\n

o   Liquid bulk terminals<\/strong><\/p>\n\n\n\n

\u00b7       Managed by Hambantota International Port Group (HIPG)<\/strong>, a joint venture between China Merchants Port (85%)<\/strong> and Sri Lanka Ports Authority (15%)<\/strong>.<\/strong><\/p>\n\n\n\n

Hambantota Port Income: Hypothetical vs Actual Performance<\/strong><\/strong><\/p>\n\n\n\n

1.<\/strong> <\/strong>Hypothetical Earnings Without Leasing (Sri Lanka runs port alone):<\/strong><\/strong><\/p>\n\n\n\n

\u00b7       Assumption:<\/strong> <\/strong>Sri Lanka retained full control and funded development through loans or state funds.<\/strong><\/p>\n\n\n\n

\u00b7       Reality:<\/strong> <\/strong>Before leasing, the port saw extremely low traffic:<\/strong><\/p>\n\n\n\n

o   Less than<\/strong> <\/strong>200 ships per year<\/strong> <\/strong>compared to 5,000+ at Colombo Port.<\/strong><\/p>\n\n\n\n

o   Annual revenue was under $1 million, while annual operating losses reportedly reached $10\u201312 million due to low throughput and debt-servicing costs.<\/strong><\/p>\n\n\n\n

o   Throughput averaged less than 200 ships per year\u2014minuscule compared to over 5,000 at Colombo Port.<\/strong><\/p>\n\n\n\n

\u00b7       Challenges:<\/strong> <\/strong>Sri Lanka lacked:<\/strong><\/p>\n\n\n\n

o   Expertise in port marketing and global shipping networks.<\/strong><\/p>\n\n\n\n

o   Ability to drive transshipment traffic independently.<\/strong><\/p>\n\n\n\n

o   Capital to modernize the port for commercial viability.<\/strong><\/p>\n\n\n\n

2.<\/strong> <\/strong>Current Model (Post-China Lease to CMPort):<\/strong><\/strong><\/p>\n\n\n\n

\u00b7       Lease Deal (2017):<\/strong> <\/strong>$1.12 billion paid to Sri Lanka (used to settle urgent foreign debt).<\/strong><\/p>\n\n\n\n

\u00b7       Operator:<\/strong> <\/strong>China Merchants Port (85% stake), SLPA (15%).<\/strong><\/p>\n\n\n\n

\u00b7       Progress:<\/strong><\/strong><\/p>\n\n\n\n

o   Over<\/strong> <\/strong>2,000 ships per year<\/strong> <\/strong>as of recent data.<\/strong><\/p>\n\n\n\n

o   Expansion into logistics, energy, and industrial zones underway.<\/strong><\/p>\n\n\n\n

o   Long-term projected hub for Indian Ocean transshipment and energy.<\/strong><\/p>\n\n\n\n

\u00b7       Sri Lanka\u2019s Revenue:<\/strong><\/strong><\/p>\n\n\n\n

o   SLPA receives a<\/strong> <\/strong>share of port-related income<\/strong> <\/strong>(undisclosed in public domain), plus<\/strong> <\/strong>employment and tax benefits<\/strong>.<\/strong><\/p>\n\n\n\n

o   Also retained<\/strong> <\/strong>sovereignty and security control<\/strong>.<\/strong><\/p>\n\n\n\n

Had Sri Lanka retained full control, Hambantota would likely have remained a white elephant \u2014draining national finances with minimal return.<\/em><\/strong><\/strong><\/p>\n\n\n\n

The China lease enabled:<\/strong><\/strong><\/p>\n\n\n\n

\u00b7      Capital infusion<\/strong><\/p>\n\n\n\n

\u00b7      Operational efficiency<\/strong><\/p>\n\n\n\n

\u00b7      Growth in cargo volumes<\/strong><\/p>\n\n\n\n

\u00b7      Strategic use of a once-idle asset<\/strong><\/p>\n\n\n\n

Thus, if Sri Lanka had held onto Hambantota without leasing it, the port would have remained a loss-making monument to debt. The lease arrangement brought in over $1 billion in urgently needed foreign exchange, but transformed a dormant facility into a growing logistics hub\u2014 something unlikely to have been achieved under Sri Lanka\u2019s fragmented political environment, where infrastructure projects often became politicized instead of being prioritized – and strategic infrastructure often falls victim to short-term politicking rather than long-term national planning.<\/strong><\/p>\n\n\n\n

Port Achievements (2020\u20132023): From White Elephant to South Asia\u2019s Maritime Powerhouse<\/strong><\/strong><\/p>\n\n\n\n

Strategic Location:<\/strong><\/strong><\/p>\n\n\n\n

\u00b7       Positioned on the world\u2019s busiest East\u2013West maritime trade route.<\/strong><\/p>\n\n\n\n

Maritime Growth:<\/strong><\/strong><\/p>\n\n\n\n

\u00b7       Over 2,000 ship arrivals in 2023 \u2014 a 30%+ increase from 2020.  <\/strong><\/p>\n\n\n\n

\u00b7       Now the largest vehicle transshipment hub in South Asia, handling major global auto brands.<\/strong><\/p>\n\n\n\n

Local Economy:<\/strong><\/strong><\/p>\n\n\n\n

\u00b7       Thousands of new jobs created in logistics, port services, and support industries.<\/strong><\/p>\n\n\n\n

\u00b7       Dedicated industrial zone now drawing increased FDI and regional trade interest.<\/strong><\/p>\n\n\n\n

Revenue Growth:<\/strong><\/strong><\/p>\n\n\n\n

\u00b7      Port revenue surged 81% from 2020 to 2023, marking a dramatic financial turnaround<\/strong><\/p>\n\n\n\n

Sovereignty Maintained:<\/strong><\/strong><\/p>\n\n\n\n

\u00b7      Sri Lankan Navy retains full security oversight.<\/strong><\/p>\n\n\n\n

\u00b7<\/strong>     <\/strong> No military presence or strategic control ceded to any foreign power.<\/strong><\/p>\n\n\n\n

Sri Lanka’s Debt Reality<\/strong><\/strong><\/p>\n\n\n\n

\u00b7       Less than 10% of Sri Lanka\u2019s total external debt is owed to China.<\/strong><\/p>\n\n\n\n

\u00b7       Majority lies with Western bondholders and multilateral lenders like the IMF and World Bank.<\/strong><\/p>\n\n\n\n

\u00b7       Sri Lanka never defaulted on the Hambantota loan.<\/strong><\/p>\n\n\n\n

Who Spread the Debt Trap\u201d Narrative?<\/strong><\/strong><\/p>\n\n\n\n

\u00b7      Politicians:<\/strong> Harsha de Silva, Eran Wickramaratne, Ranil Wickremesinghe, Mangala Samaraweera, Anura Kumara Dissanayake, Sajith Premadasa, M. A. Sumanthiran.<\/strong><\/p>\n\n\n\n

\u00b7      Think Tanks & Economists:<\/strong> Dr. Nishan de Mel (Verit\u00e9), Dr. Ganeshan Wignaraja, Asanga Abeyagoonasekera, Akhilan Kadiragamar, <\/strong><\/p>\n\n\n\n

\u00b7      Media Figures & NGOs:<\/strong> Feizal Samath, Roel Raymond, Jehan Perera (NPC), CPA, Groundviews, Hashtag Generation, Roar Media, YAMU, Tisaranee Gunasekera<\/strong><\/p>\n\n\n\n

\u00b7      Online Influencers:<\/strong> SL Vlog, Patta History.<\/strong><\/p>\n\n\n\n

Ironically, those criticizing the China deal were the ones who executed the lease in 2016\u20132017 under the Ranil-Mangala administration.<\/strong><\/p>\n\n\n\n

Who Pushes the Debt Trap Narrative and Why?<\/strong><\/strong><\/p>\n\n\n\n

\u00b7      Western think tanks (CSIS, Chatham House, Carnegie).<\/strong><\/p>\n\n\n\n

\u00b7      Indian lobbies (ORF, SVIF).<\/strong><\/p>\n\n\n\n

\u00b7<\/strong>     <\/strong> Strategic players keen to keep Sri Lanka in their geopolitical orbit.<\/strong><\/p>\n\n\n\n

Comparative Silence on Indian Strategic Control<\/strong><\/strong><\/p>\n\n\n\n

While Hambantota draws disproportionate international scrutiny, India’s expanding footprint in Sri Lanka’s strategic infrastructure receives little to no public or diplomatic pushback:<\/strong><\/p>\n\n\n\n

\u00b7      Trincomalee Oil Tank Farms<\/strong>: India controls 85 of 99 tanks.<\/strong><\/p>\n\n\n\n

\u00b7      Colombo Dockyard<\/strong>: Controlled by India’s defence ministry company -to build military ships in Sri Lanka.<\/strong><\/p>\n\n\n\n

\u00b7      Colombo West Container Terminal<\/strong>: 51% owned by Adani Group.<\/strong><\/p>\n\n\n\n

\u00b7      SAGT (via John Keells):<\/strong> Lease may be extended with Indian partnership.<\/strong><\/p>\n\n\n\n

\u00b7      Renewable Energy Grid (North):<\/strong> Led by Adani; strategic implications for Sri Lanka\u2019s grid sovereignty.<\/strong><\/p>\n\n\n\n

These deals rarely spark public debate-despite their implications for national sovereignty and regional neutrality.<\/strong><\/strong><\/p>\n\n\n\n

Troika Vision Realized:<\/strong><\/strong><\/p>\n\n\n\n

Hambantota\u2019s potential lies in synergy:<\/strong><\/strong><\/p>\n\n\n\n

1.     Integrating Port + Airport (Mattala) + Industrial Zone.<\/strong><\/p>\n\n\n\n

2.     Bypasses congested Colombo for direct access to global trade.<\/strong><\/p>\n\n\n\n

3.<\/strong>    <\/strong> During COVID-19 pandemic, Mattala Airport played a key logistics role.<\/strong><\/p>\n\n\n\n

Think Strategically, not Emotionally<\/strong><\/strong><\/p>\n\n\n\n

The so-called debt trap\u201d narrative was never about protecting Sri Lanka. It was about limiting & controlling Sri Lanka\u2019s choices and its partnerships. <\/strong><\/p>\n\n\n\n

Hambantota Port lease was a sovereign decision. It has delivered returns. It is generating income and employment. It preserves national sovereignty. <\/strong><\/p>\n\n\n\n

Instead of fearmongering, Sri Lanka must engage with all partners based on facts, mutual benefit, and strategic independence for national interests \u2014not emotion or outdated ideological loyalties or geopolitical appeasement.<\/strong><\/p>\n\n\n\n

Sri Lanka must judge partners by outcomes, not narratives or compromise & appeasement.<\/strong><\/p>\n\n\n\n

Shenali D Waduge<\/strong><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Shenali D Waduge Hambantota Port has been wrongly portrayed as a symbol of China\u2019s debt trap diplomacy.\u201d In truth, it was a strategic infrastructure investment, misrepresented by local and foreign actors with geopolitical agendas. Here are the facts. Hambantota Port: A Factual Q&A Historical Maritime Significance \u00b7      The name Hambantota\u201d is believed to derive from Sampan-thota,\u201d meaning port of sampans\u2014for small […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"class_list":["post-151290","post","type-post","status-publish","format-standard","hentry","category-shenali-waduge"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/151290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=151290"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/151290\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=151290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=151290"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=151290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}