Shipping Minister details P’ment of CMPort payments on Hambantota

Monday, 23 July 2018 00:00 - - {{hitsCtrl.values.hits}}

By Ashwin Hemmathagama

Based on the provisions of the concession agreement signed, China Merchants paid a sum of $ 973,658,000 to the Government to continue the public private partnership (PPP) at the Hambantota Port.

In addition, the Hambantota International Port Group Ltd. is expected to pay the Sri Lanka Ports Authority royalty within the first 25 years. According to this royalty payment schedule, the SLPA will receive $ 100,000 per annum during the first 1-5 years, $ 200,000 per annum during the 6 – 10 year period, $ 300,000 per annum during 11 – 15 years, $ 400,000 per annum during 16 – 20 years, and $ 500,000 per annum during 21 – 25 years.

After completion of the period of 25 years, a sum of $2.25 is to be paid as a royalty for each container and this amount will increase by 3% every five years. Further, Rs.10per ton is to be paid as royalty for break bulk cargo and this amount will also increase by 3% every five years, the Government told the Parliament on Friday.

Rejecting the Opposition charges of privatising the Hambantota port, Ministry of Ports and Shipping in a statement to the Parliament clarified that the Hambantota port was not privatised but has received two proposals for a PPP as a result of the high-level discussion that took place between the Sri Lankan and Chinese governments.

“A special secretariat committee was appointed to review these proposals by the Cabinet Committee on Economic Management and to carry out discussions with the aim of entering into the agreement and considering the recommendations of the said committee. And considering suggestions made by the Cabinet Sub Committee on Economic Management, the Cabinet of Ministers have made the relevant selection, and according to a decision taken by the Cabinet on 6 December 2016, permission was granted to enter into a framework agreement with the company selected. As a result, the framework agreement was signed on 8 December 2016, and the concessions agreement on 29 July 2017 with the two companies selected,” the Ministry explained in a statement.