SLPA spends Rs. 9.3 b on Hambantota port

By Waruni Paranagamage

The Colombo port had Rs. 9.3 billion taken from its profits to pay for the Hambantota port’s operations for 10 months of this year, Ports and Shipping Minister Arjuna Ranatunga told Parliament.

The Colombo port saw a five-fold increase in its revenue compared to the Hambantota port, he noted. 

“These payments were mainly allocated for the operational cost of the Hambantota port which amounted to Rs. 2.5 billion and for debt servicing which stood at Rs. 8.4 billion. However, the overall expenditure of the Hambantota port during the first 10 months of this year amounted to Rs. 11 billion as against its revenue which was Rs.1.7 billion,” Ranatunga emphasised.   

He went on to say that from all the ports, Colombo generated the most profit during the first 10 months of this year, with it recording Rs. 29.3 billion, which is 91.15% of the overall earnings of Rs. 32.23 billion.

“This kind of outlandish expenditure critically hinders the momentum of development of the Colombo port. We need funds to cover fixed expenditure, infrastructure development and human resource development of the Colombo port,” the Minister stressed.

The Minister further commented on the significant corruption that had occurred when the previous Government had entered into agreements with foreign banks for loans to develop the Hambantota port. He said interest rates and the conditions of agreements were notably in favour of foreign banks.

“There are three kinds of lubricants which are used for ship operations worldwide. The most popular variety of IFO-380 is being used for engine operations in bulk ships. But what has been purchased is a large amount of Marine Gas Oil for the Hambantota port. This is a variety that has low demand in the market,” Ranatunga said. 

Lubricants were purchased through a $ 24 million loan obtained through a private commercial bank of which $ 19.76 still has to be repaid by the SLPA along with Rs.9 million as interest each month. The minister insisted such a cost was prohibitive for the authority. 

However, discussions are underway to refinance the Chinese loan and thereby reduce repayments over an extended period of time, the Minister told Parliament. However, he declined to give any further details.