Agreement signed today: Billion dollar investment salvages Hambantota

The government will enter into a billion-dollar partnership with a state-owned Chinese company today to revive the loss-making Hambantota port, the Prime Minister announced as the opposition ditched a debate on the issue.

Prime Minister Ranil Wickremesinghe said the government would conclude the agreement today on the $1.1 billion deal with China Merchants Port Holdings to jointly manage the port which had become a huge burden on the economy.

Cash from the Chinese firm’s majority stake will be used to repay part of Sri Lanka’s huge foreign debt, the Prime Minister said.

He accused members of the Joint Opposition of scuttling a parliamentary debate the government offered on the deal that involves the transfer of a 70 percent stake to the Chinese firm on a 99-year lease. “We tried to get them into a debate.

They (the JO) did not make use of the opportunity we gave them in parliament to talk about it,” The Prime Minister said. “But, how can they oppose this.”

“At the adjournment time (of parliament) the Opposition was disruptive, the Speaker asked them to go and sit. They did not go and sit, so the adjournment took place.

“Let us face the facts. How can they (the JO) go and oppose this Hambantota deal. How can they oppose it. Who signed it? We are giving the country a better deal without debt. Without any implications of security,” he said.

The Prime Minister made it clear that the former Rajapaksa regime was planning to hand over the Hambantota port on a platter to the Chinese as the government was unable to repay the huge debt.

The Prime Minister said the Hambantota port had accumulated a loss of Rs 46.7 billion since 2011. This money could have been better spent on education.

He said the government will also arrange an investor for another white elephant project of the former president, the Mattala airport, by the end of this year.

“We can find a partner for the Mattala airport by the end of this year, but I have bad news for you,” he said. “There are no takers for the Sooriyawewa cricket grounds and tax payers will have to pay for its upkeep.”

He noted that the previous government had borrowed $1.5 billion to build the port, but the Chinese valued it at much less and around $1.4 billion.Asked why there was such a discrepancy, the Prime Minister said: “That is the 1.5 billion dollar question!” The government has already announced that the Sri Lanka Navy will be responsible for the security of the port and no foreign navy will be allowed to use it as a base.

The Prime Minister also announced that the government expects between two to three billion dollars in foreign direct investments in the next two years and much of it will come from China, India and Japan.