Friday Nov 15, 2024
Friday Nov 15, 2024
Thursday, 6 April 2017 00:10 - - {{hitsCtrl.values.hits}}
Prime Minister Ranil Wickremesinghe yesterday rejected the Joint Opposition’s accusations that the Government was selling the Hambantota Magampura Mahinda Rajapaksa Port to investors from China.
The Premier explained the background to the Government opting for a lease option as a joint venture, which would reduce the debt and repayment period.
“There is no principle agreement to sell it to a Chinese company. The previous Government has obtained a massive loan to build this port and the last payment was to be settled in 2038. During our visit to China we told them that we are unable to repay the loan and the decision to cancel the borrowing. So both the Chinese President and the Prime Minister discussed the matter and told us that they understood our difficulty. They offered the option to go for a joint venture rather than selling it. As for the SOT, there were two companies involved – China Merchant Ltd. and China Harbour Ltd. These were the companies found in the agreement with former President Mahinda Rajapaksa.
“In 2012, the former President obtained a loan from the Exim Bank to construct this Port. We were to service the debt after a grace period of 48 months. The situation is far different compared with a vehicle filling station. According to Clause 48 of the said agreement, in the event of default the bank could recover the capital and the interest at the same time. So the debt repayment starts in 2016. Due to the loss, the former President brought a new proposal having signed an agreement with the Chinese President who was here on a visit. According to Clause 12 of the new proposal, Sri Lanka has willingly agreed to support China in its plan to make Sri Lanka a part of its silk route program by continuing to further develop the Hambantota Magampura Port. This was the agreement signed between the two governments. So the Sri Lanka Ports Authority signed a SOT agreement with China where we received 35.2% of the total stake. The remainder was taken by the Chinese. In return, China inserted the capital and interest as their investment in the project. This is how the port was sold to China. According to Clause 8 of the same agreement, we have guaranteed not to start any other competing infrastructure facilities before the container terminal starts operations under the SOT and achieves an annual throughput of 1.5 million TEU or the eighth year in operation,” said the Prime Minister.
“We were told that all ships sailing by would visit this port for bunker and supplies. But none called and it is different from the fuel station at Alexandra Roundabout. Anyway, with the new agreement the current Government signed we were able to reduce the repayment period by two years. And the China agreement to recognise Sri Lanka and support development plans centred on Sri Lanka. We had to agree for 99 years compared to the ownership option, which was available and the vested interest it would give especially for the economic zone around the island. We have leased nearby land for other projects, including container terminals, an oil refinery, steel mill, dockyard, LNG plant and two cement manufacturing plants. Estimates were done by the Chief Valuer,” he added, promising to table all the agreements for debate. (AH)
