China Merchant Port Holdings Pays USD 584 mln to Hambantota Port
China Merchants Port Holdings (CM Port) has invested the final tranche of USD 584.2 million in Sri Lanka’s Hambantota Port after acquiring an 85 percent stake in the port last year.
The cheque to the effect was handed over to the Chairman of Sri Lanka Ports Authority (SLPA) – Dr.Parakrama Dissanayake by the Chief Representative of China Merchant Group in Sri Lanka - Mr.Ray Ren in the presence of senior port officials and representatives of CM Port. This makes the single highest ever Foreign Direct Investment (FDI) received by Sri Lanka to date.
This third final tranche in the amount of US $ 584,194,800 follows the 1st, a 2nd tranches released in December last year and January 2018, in amounts US $ 292 million and US $ 97 million.
With this payment CM Port fulfills the US $ 976 million investment value 1 of the port concession and in terms of the Concession Agreement, CM Port has agreed to deposit a further sum of US $ 146 million being investment value 2 to be utilized for port and marine related activities.
In view of urgent need for viable and efficient operation of the Port of Hambantota, on the direction and leadership of the Hon.Minister of Ports and Shipping Mahinda Samarasinghe under the guidance of His Excellency the President and Prime Minister, Sri Lanka Ports Authority (SLPA) and the Government of Sri Lanka entered into the Concession Agreement with China Merchant Port Holdings Limited of Hong Kong in July last year for management, operation and development of Hambantota Port on Public Private Partnership model.
On 09th December last year two Sri Lankan companies established under the concession agreement namely, Hambantota International Port Group (HIPG) and Hambantota International Port Services Co. (Pvt) Ltd. (HIPS) officially took over the Hambantota Port thereby making the concluded concession agreement effective.
“CM Port is one of the most successful global companies in the ports sector, and their investment in the Port of Hambantota can be described as a credible vote of confidence in its potential as well as in the economy of Sri Lanka,” said Parakrama Dissanayake – Chairman SLPA.
The two companies established in Hambantota plans further to invest an additional US$ 400 million to US$ 600 million on phase I and II of the Hambantota Port. These investments will attract many other foreign investors to the country, making Sri Lanka a pivotal maritime and Logistics Centre.
During the year 2017, Port of Colombo was ranked as the 23rd largest Container Port and 13th best connected Port in the world. SLPA also recorded a Net Profit of Rs 13.2 Billion in 2017, as against a Net Profit of Rs 1 Billion achieved in 2016 .
With transhipment volumes in the Port of Colombo during the first 05 months of 2018 as against 2017 increasing by 19.2% and Jaya Container Terminal managed by SLPA recording a transhipment growth of 21% during the aforesaid period, the conclusion of the Concession Agreement of Hambantota Port would further enhance the profitability of SLPA.
