Ports and Shipping Minister Mahinda Samarasinghe said the Sri Lanka Ports Authority (SLPA) has come up with certain proposals on Hambantota Port which are not hard for the Chinese side to accept, adding the Government was seeking certain safeguards so as to not jeopardise the national interest in any way.
“National interest is paramount and being a friendly country, I have no doubt that the Chinese side will also understand and appreciate that our interest too has to be safeguarded,” the Minister told the Sunday Observer yesterday.
Minister Samarasinghe said the location of Hambantota Port was excellent and there are no two words about it. But we have to make sure that whilst that operation goes on, the Colombo Port’s interests are also safeguarded.
“At present, we have a Chinese investor who is interested in coming in on the basis of 80-20 deal which means 80 percent will be held by the investor and 20 percent by the SLPA. The value of the 80 percent is US$ 1.12 billion.
When that money comes in, we can use it to pay off the loan and there will be a balance which will then be put into our international reserves,” he said.
“No one is going to come and pump in US$ 1.12 billion to Sri Lanka because they like us. There has to be some economic returns for them as well.
This we don’t want to interfere with and that has to be there. But there are certain things in the agreement that needs to be fine-tuned and clarified.”
The Minister said the Hambantota Port was not a creation of the present Government. It was constructed during the previous Government’s tenure and a loan was sourced from China.
“When we formed the Government, we were immediately saddled with this huge problem of how to repay this loan. Hambantota has still not become a viable port.
Vehicles are unloaded and that is all. So, we had to justify this investment and the SLPA had to take on the responsibility of servicing the loan.”
In the first four months of this year, we have paid Rs. 4 billion from the Ports Authority to service the loan. It is a huge burden on the SLPA.
“Bearing this in mind, Prime Minister Ranil Wickremesinghe when he visited China met the Chinese President Xi Jinping and discussed our difficulties under the present economic circumstances and asked for a solution.”
The Chinese President instructed his officials to find a solution and they came back with this counter offer of bringing in a suitable investor to run the port on a lease basis and it was not an outright sale. The lease period will be determined during discussions, the Minister said.