Sri Lanka, China sign $1.1 billion Hambantota Port Deal

Sri Lanka signed a $1.1 billion deal to sell a 70% stake in the strategic Hambantota port to China, amid concerns over the massive debt the island nation incurred in building the port.
The deal had been delayed by several months over concerns that the deep-sea port could be used by the Chinese Navy.
Cash-rich China has invested millions of dollars in Sri Lanka’s infrastructure since the end of a brutal civil war in 2009.
As part of the deal, the stake in the loss-making port has been sold to China’s state-run conglomerate China Merchant Port Holdings (CMPort).
Sri Lanka’s Minister of Ports and Shipping Mahinda Samarasinghe and China’s envoy to Colombo Yi Xianliang were present when the Concession Agreement was signed.
Under the 99-year lease agreement, CMPort is to invest up to $1.1 billion in the port and marine-related activities.
The agreement was open for further amendments,
The deal may raise security concerns in India.
According to the new deal, only Sri Lankan Navy will be responsible for the security of the deep-sea port, and the port will not be allowed to become a base for any foreign Navy.
The new provision is seen as an attempt to allay India’s concerns over Chinese Navy’s possible presence in Sri Lanka.
The port, overlooking the Indian Ocean, is expected to play a key role in China’s Belt and Road Initiative, which will link ports and roads between China and Europe.
The Sri Lankan government had to face huge opposition to the deal from trade unions, who called it a sellout of the country’s national assets to China.
Last week, petroleum workers brought the country to a standstill for two days by stopping fuel distribution. They called the deal a sell out of national assets to China.
The initial 80:20 share distribution has been revised to 69.55% to CMPort and 30.45% to Sri Lanka Port Authority.

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