Sri Lanka’s government on Saturday signed a long-delayed agreement to sell a 70% stake in a USD 1.5-billion port to China in a bid to recover from the heavy burden of repaying a Chinese loan obtained to build the facility, report local media.
After 10 years of negotiations, China Merchants
Port Holdings has signed the agreement with the Sri Lanka Ports Authority to develop the Hambantota Port in southern Sri Lanka.
According to the agreement, which is described as "a win-win situation for both countries". the Chinese firm will run the workings of the newly constructed port over a 99-year lease.
The Port of Hambantota is located on the Southern coast of Sri Lanka occupying a prime location within 10 nautical miles to the main shipping route from Asia to Europe
and is also in a strategic position along the “Silk Road Economic Belt and the 21st Century Maritime Silk Road”.
Minister Mangala Samaraweera said that in addition to the US$ 1.12 billion further 600 million US dollars will be spent to modernize the Hambantota harbor considered as the largest swimming pool of the world.
Hu Jianhua, the executive vice-president of the China Merchants Port said the port facilities belong to the citizens of Sri Lanka but will be a key part of China's massive One Belt One Road initiative to build trade and transport links across Asia and beyond.
Hambantota Port is a comprehensive deep-water port, the Hambantota Port project is a project to develop a major industrial and service port with an attached industrial zone in the Port of Hambantota and it is currently expected that the project will comprise of three phases. With 10 berths in Phase 1 and 2, and quay length of up to 3,487 meters; the berths are specialized to handle containers, bulk cargos, general cargos, RO-RO cargos and liquid bulk.
Water depth alongside the quay and navigation channel is -17 meters, which makes Hambantota Port a deep-water port capable of handling super-mega vessels. Hambantota Port has great potential for future expansion, with its hinterland covering the South Asian region
, and as a maritime hub in the region.