The Hush Post: Sri Lanka on Saturday handed over port of Hambantota to China on a 99-year lease. It is the most strategic port from the point of view of Sri Lanka and China. In order to rest India’s fears regarding security concerns over the Chinese navy’s presence in the island country, Wickremesinghe has ruled out the possibility of the strategic port being used for “military purposes.”
This port in the Indian Ocean is expected to play a key role in China’s Belt and Road initiative, which will be an important commercial link between China and Europe. Two Chinese firms — Hambantota International Port Group (HIPG) and Hambantota International Port Services (HIPS) managed by the China Merchants Port Holdings Company (CMPort) and the Lankan Ports Authority will own the port and the investment zone around it. Sri Lankan PM Ranil Wickremesinghe during a recent visit to China had concurred to swap equity in Chinese infrastructure projects launched by former president Mahinda Rajapaksa. Sri Lanka owed China $8 billion, then finance minister Ravi Karunanayake had said.
“With this agreement we have started to pay back our loans. Hambantota will be converted into a major port in the Indian Ocean,” Wickremesinghe said while addressing the handing over ceremony held in parliament.
“There will be an economic zone and industrialisation in the region which will lead to economic development and promotion of tourism activity,” the Prime Minister said. The Sri Lankan government had signed a $1.1 billion deal in July to sell a 70 per cent stake in the Hambantota port to China. Sri Lanka received $300 million as the initial payment under the lease agreement.