Government sets sail on Hambantota Port

Friday, 9 December 2016 00:50 - - {{hitsCtrl.values.hits}}

By Chathuri Dissanayake

The Framework Agreement (FA) between the Sri Lankan Government and the Chinese investor to revive the Hambantota Port was signed last evening.

The FA outlines the terms of references between the Government and Chinese State-owned corporate China Merchants Port Holdings Company Ltd. (CMPort).

Ministry of Development Strategies and International Trade Malik Samarawickrama told Daily FT that the company would now carry out the due diligence valuation process.

“Once that is done we will negotiate a concession agreement. I anticipate that it will be similar to those given in the Colombo Port. Once these elements are agreed upon it will be ok to sign the concession agreement,” the Minister said.

The Government this week decided to enter into a Public-Private Partnership with CMPort to manage the Hambantota Port with 80% ownership to be held by the Chinese investor. CMPort will invest $ 1.12 billion in the project, of which $ 5 million will be paid as a security deposit immediately upon signing the FA, while the rest is payable within a year of signing all transaction documents including the Concession Agreement and legislation changes.

The Minister said that the Government hoped to complete the negotiations and sign all agreements in January in time to launch the project to coincide with the second anniversary of Maithripala Sirisena’s presidential inauguration.

Ministerial secretaries from the Ports, Development Strategies and Internal Trade and Special Assignments ministries signed on behalf of the Sri Lankan Government while the Vice President of CMPort and two other officials from the company signed the FA at a meeting held at the Treasury.