Sri Lanka to sell 80 percent of southern Hambantota port to Chinese firm

[HeinzGud]

Sri Lanka will sell to a Chinese company 80 percent of a $1.5-billion port in its south, where China has also been offered an investment zone, in a bid to cut the country's debt burden, Finance Minister Ravi Karunanayake said.

The move follows an offer made by Prime Minister Ranil Wickremesinghe during a visit to China in April, to swap equity in Sri Lankan infrastructure projects against some of the $8 billion in debt the Indian Ocean island owes to China.

The Hambantota port was built with the help of Chinese loans and contractors in 2010 under former leader Mahinda Rajapaksa, as part of efforts to boost development of infrastructure after the conclusion of a 26-year-long civil war in 2009.

But the port, and a nearby airport, also Chinese-financed, had been seen as a white elephant because it was not financially viable, the current government has said.

"For somebody like the Chinese, it is the silk route transit point," Karunanayake told a meeting of the country's Foreign Correspondents Association late on Thursday.

China's interest in the port is seen as part of its ambitions to build a "Maritime Silk Route" to the oil-rich Middle East and onwards to Europe.

That makes some countries, including India and the United States, nervous, with Sri Lanka sitting near shipping lanes through which much of the world's trade passes en route to China and Japan.

"The value will be more than $1 billion and the deal will be signed around the second week of November," Karunanayake said, adding that a Chinese port operator would get 80 percent of the port stake. He declined to identify the company involved.

"The money from the deal will be used to repay expensive foreign loans," Karunanayake said, adding that the government was also in final talks over a 15,000-acre (6,100-hectare) investment zone near the port.

The investment zone deal would be signed as "soon as possible", Karunanayake said.

http://www.reuters.com/article/us-s...ampaign=Feed:+news/deals+(Reuters+Deals+News)

 

[Srinivas_K]

Is there any trade activity in this port?

China itself is shifting its gears to become consumer driven economy these days.

Sri Lanka will sell to a Chinese company 80 percent of a $1.5-billion port in its south, where China has also been offered an investment zone, in a bid to cut the country's debt burden, Finance Minister Ravi Karunanayake said.

The move follows an offer made by Prime Minister Ranil Wickremesinghe during a visit to China in April, to swap equity in Sri Lankan infrastructure projects against some of the $8 billion in debt the Indian Ocean island owes to China.

The Hambantota port was built with the help of Chinese loans and contractors in 2010 under former leader Mahinda Rajapaksa, as part of efforts to boost development of infrastructure after the conclusion of a 26-year-long civil war in 2009.

But the port, and a nearby airport, also Chinese-financed, had been seen as a white elephant because it was not financially viable, the current government has said.

"For somebody like the Chinese, it is the silk route transit point," Karunanayake told a meeting of the country's Foreign Correspondents Association late on Thursday.

China's interest in the port is seen as part of its ambitions to build a "Maritime Silk Route" to the oil-rich Middle East and onwards to Europe.

That makes some countries, including India and the United States, nervous, with Sri Lanka sitting near shipping lanes through which much of the world's trade passes en route to China and Japan.

"The value will be more than $1 billion and the deal will be signed around the second week of November," Karunanayake said, adding that a Chinese port operator would get 80 percent of the port stake. He declined to identify the company involved.

"The money from the deal will be used to repay expensive foreign loans," Karunanayake said, adding that the government was also in final talks over a 15,000-acre (6,100-hectare) investment zone near the port.

The investment zone deal would be signed as "soon as possible", Karunanayake said.

http://www.reuters.com/article/us-sri-lanka-ports-idUSKCN12S12R?feedType=RSS&feedName=innovationNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+news/deals+(Reuters+Deals+News)

 

[India22]

http://www.forbes.com/sites/wadeshepard/2016/11/17/sri-lanka-claims-it-didnt-really-sell-key-national-infrastructure-to-china/#126d8a9578d5

 

[Project Dharma]

http://www.forbes.com/sites/wadeshepard/2016/11/17/sri-lanka-claims-it-didnt-really-sell-key-national-infrastructure-to-china/#126d8a9578d5

Sri Lanka is currently caught in a severe debt trap. Between 2009 and 2014 the country’s total government debt tripled and external debt doubled, amounting to $64.9 billion — $8 billion of which is owned by China. 95.4% of all government revenue is currently going towards debt repayment, with a third of all earnings going to China. This dire situation resulted in a recent $1.5 billion IMF bailout.

This seems like the future of Pakistan with CPEC

 

[DingDong]

Sri Lanka is currently caught in a severe debt trap. Between 2009 and 2014 the country’s total government debt tripled and external debt doubled, amounting to $64.9 billion — $8 billion of which is owned by China. 95.4% of all government revenue is currently going towards debt repayment, with a third of all earnings going to China. This dire situation resulted in a recent $1.5 billion IMF bailout.

This seems like the future of Pakistan with CPEC

China is good at managing the governments and dictators, and India is good at managing the public sentiments, more so in her backyard.

These debt traps will leave nothing in the public coffers of the governments, general public will eventually realize how they have been duped and exploited.

India must take full benefit of the fledging situation to topple the unfriendly governments and to eliminate known enemies in her neighborhood.

 

[indiazain]

This seems like the future of Pakistan with CPEC

Oh yes Porkis problems will be way way way more expensive,they just created "Task force 88" to protect themselves from Taliban Cavemen.The Pokis already gave up a part of Kashmir which they cannot handle.
Google"pakistan gifted part of kashmir to china" for more info.

 

[airtel]

japantimes.co.jp
Sri Lanka troops fire warning shots at protesting dock workers keeping Japanese ship in port | The Japan Times
COLOMBO –


Sri Lankan naval troops fired warning shots to break up a protest by striking dock workers who have held up a Japanese vessel for four days at the island’s southern international port.

Troops entered Hambantota port from the sea Saturday and fired warning shots to disperse the crowd, considering their action an “act of piracy,” navy spokesman Akram Alavi said.

The protesters had prevented the Japanese vehicle carrier Hyperion Highway from leaving the port.

No casualties were reported.

After the navy’s intervention, the Japanese ship sailed Saturday afternoon toward its next destination, Oman, Alavi said.

Temporary workers began striking Tuesday, demanding to be made permanent employees of the state-run Sri Lanka Ports Authority, which manages the island nation’s ports. The workers fear they may lose their jobs as the government is planning a deal with a Chinese firm — the China Merchants Ports Holding Company — to hand over a 80-percent stake in the loss-making $1.4 billion port.

The Chinese firm says it will invest $1.12 billion to revive the port, which was built with the help of Chinese loans and contractors.

Tressel Silva, the general manager of ABC Shipping, said the Japanese ship was carrying 5,000 vehicles and had left some of them at the port. He said the shipping line was losing $100,000 per day due to the protest.

http://www.japantimes.co.jp/news/20...ting-dock-workers-keeping-japanese-ship-port/

 

[airtel]

* Sri Lanka Navy frees Japanese cargo ship held by Hambantota Port workers

Sat, Dec 10, 2016, 08:38 pm SL Time, ColomboPage News Desk, Sri Lanka.

Dec 10, Colombo: The Sri Lankan Navy on Saturday freed a Japanese cargo ship held by a group of workers at the Hambantota Harbor to ransom for the past few days to protest against privatization of the idling port through a deal with a Chinese company.

The Sri Lankan security forces fired warning shots Saturday to disperse striking dock workers who have prevented a Japan's "K" Line vessel Hyperion Highway from leaving the port for four days for its next destination Oman, navy spokesman.

Navy spokesman said armed navy sailors used boats to reach a pier occupied by the workers to disperse the striking workers and the Navy helped cast the ship to the sea.

Captain Akram Alavi said the detention of a ship in this way is tantamount to "piracy" under international law and the Navy, designated as the competent authority had to intervene and free the ship for leaving the harbor.

"We were called in because the action of the dock workers amounted to sea piracy," Captain Akram told AFP. "We went in to make sure that the foreign vessel could have free passage."

Captain Akram said this is the first time such a detention has taken place in the history of a Sri Lankan port. There had been strikes in the harbor but no ship had been detained forcibly, he said.

A spokesman for the local agent for the vessel told AFP that ship's Bulgarian captain and 24 other crew members from the Philippines were safe, but the shipping line was losing money at the rate of $100,000 a day because it had been unable to leave on schedule.

The vehicle carrier Hyperion Highway owned by Kawasaki Kisen Kiyasa of Japan, had berthed in the harbor on December 6. Captain Akram said the vessel should now be able to leave by Saturday night.

Temporary employees of the Magampura Port Management Company (MPMC) employed at the Hambantota Port launched the strike on Tuesday demanding the government to make them permanent employees of the state-owned Sri Lanka Ports Authority (SLPA).

Opposition legislators told parliament Saturday that eight workers were wounded when the navy stormed the main pier, but the government denied there were casualties.

The government signed a Memorandum of Understanding with the China Merchant Holdings Limited (CMHL) to lease the loss-making $1.3 billion Chinese-built harbor. According to the MoU, the CMHL will hold 80 percent stake in the company and will operate the port on a 99 year lease.

The port workers oppose the government's deal fearing that privatization of the port may lead to job loss although the government has assured that actions will be taken to secure jobs of the workers during the procedure of assigning Hambantota Port to the Chinese company.

The Ports and Shipping Arjuna Ranatunga, who, according to the Express News had also protested against the deal with the Chinese company on the grounds that the SLPA which owns the island's ports will lose its control over the Hambantota port, assured the job security for the temporary employees and dismissed opposition claims that the Prime Minister Ranil Wickremesinghe ordered to sack the employees.

Prime Minister Wickremesinghe's argument is that the Hambantota port built with a Chinese loan of US$ 1.4 billion is a white elephant which cannot be turned around except by inviting a foreign company like the CMHL to run it on a commercial basis. When the CMHL runs it on a commercial basis, Sri Lanka will be able to repay the loan taken from China.

http://www.colombopage.com/archive_16B/Dec10_1481382510CH.php

 

[airtel]

newindianexpress.com
Japanese vessel detention makes shipping lines avoid Hambantota port


COLOMBO: The recent detention of a Japanese vessel by striking workers at Hambantota port in south Sri Lanka has given international shipping lines yet another reason to avoid the port.

Sri Lankan Ports Minister Arjuna Ranatunga told the media on Monday that following the detention of the Japanese car-carrying vessel causing it a loss of USD 400,000, some ships had to be diverted to Colombo while others just skirted Sri Lanka and went elsewhere.

The port, constructed by former President Mahinda Rajapaksa with a Chinese loan of US$ 1.4 billion, has been without business so far because it has no worthwhile hinterland. Unable to pay back the loan, the present Sri Lankan government headed by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe had recently given 80 % stake and near total operational control to a Chinese company.

But even as the government was battling trenchant public criticism of the deal, workers at the port went on a flash strike and detained a Japanese vessel. The strike had to be broken up by the Sri Lanka navy by force. The use of force caused a public outcry. The opposition condemned the use of force against workers who only wanted their jobs to be regularised. And the media condemned it because a cameraman of a leading publishing group was manhandled by the Navy Commander Vice Adm.R.Wijegunaratne himself.

Even as the government ordered a probe into the series of incidents in the harbour, Ports Minister Ranatunga told newspersons that some international shipping lines had informed Sri Lanka that they might not use Hambantota port.

“The detention of the vessel has eroded the confidence of the international maritime sector. The damage by the protesters is severe,” he said.

Ranatunga further said that the workers had damaged a 13-storey building as well as other equipment in the harbour. He blamed the 'Nil Balakaya', an organisation floated by MP Namal Rajapaksa who is also the son of former President Mahinda Rajapaksa.

As expected, the opposition led by Rajapaksa condemned the breaking up of the strike and criticised the deal with the Chinese company which not only envisages the grant of 80 % equity in the port’s Joint Venture company, but a 99-year lease also.

The deal had faced opposition in the government itself, with Ports Minister Ranatunga appealing to the Prime Minister not to deprive the Sri Lanka Ports Authority (SLPA) of control over the port. But Prime Minister Wickremesinghe overruled him and got the Framework Agreement signed by two other ministers, Strategic Development Minister Malik Samarawickrama and Minister for Special Assignments, Dr.Sarath Amunugama.

The Joint Opposition led by Mahinda Rajapaksa has also lambasted the government’s decision to hand over 15,000 acres of land to the Chinese to build an Economic Zone near Hambantota port to enable the creation of a suitable hinterland for it. According to the Joint Opposition, this is a major give away. It also wonders how 15,000 acres can be acquired without social and economic disruption in the poverty stricken Hambantota district.

Since the government has promised to give China 15,000 acres, it cannot back out of it, even if the issue extracts a political price from it in the local bodies’ elections in mid-2017.


http://www.newindianexpress.com/wor...ping-lines-avoid-hambantota-port-1548603.html

 

[airtel]

http://www.forbes.com/sites/wadeshepard/2016/11/17/sri-lanka-claims-it-didnt-really-sell-key-national-infrastructure-to-china/#126d8a9578d5

I think they sold it ....................but now they want to Avoid public criticism ........& protests of workers who lost their jobs .

 

[India22]

I think they sold it ....................but now they want to Avoid public criticism ........& protests of workers who lost their jobs .

Were these dockworkers Chinese?

 

[airtel]

Were these dockworkers Chinese?

no , they are citizens of Lanka but now they will be replaced with Chinese workers ...................this is why they are Protesting .

 

[Razor]

Alright this needs to be figured into the equation when dealing with SL.
It's up to SL to decide which it prefers: being a friendly neighbor or being a foreign base for far off country who is a known back-stabber.
Whichever struggle SL chooses, better make sure there ain't no chink in your armor.

 

[SANITY]

I am not sure if Sri Lanka is being unfriendly. It seems more a case of China simply has more to give being an 11 trillion dollar economy. But still being in neighbourhood,, they need to ensure to not get used fir activities harming India.

 

[airtel]

Rajapaksa threatens to overturn deal with China on Hambantota port


COLOMBO: The woes of the non-performing Hambantota port, built by former President Mahinda Rajapaksa with a Chinese loan of US$ 1.4 billion, have not come to an end with a Chinese company, China Merchant Port Holdings (CMPort) agreeing to take 80 percent stake in it and pull it out of the financial woods.

Rajapaksa, and his new organisation the Sri Lanka Podu Jana Peramuna (SLPP), have threatened to abrogate the agreement with China when they come to power.

To Rajapaksa, the SLPP and the “Joint Opposition Group”, the Sino-Lankan deal is a sellout to China, totally deleterious to the national interest. And in this, they have the support of the Marxist Janatha Vimukthi Peramuna (JVP) also.

This month, nearly 500 workers at the port struck work against its privatisation through a sale to a Chinese company. They detained a Japanese and a South African vessel for several days in an act which was tantamount to piracy. The Sri Lankan navy had to use force to evict the strikers and release the ships. As consequence, insurance companies designated Hambantota port as a high risk port, damaging the country’s image in the eyes of foreign shipping lines and foreign investors.

Rajapaksa’s objections to the deal with China are many. By giving 80 percent stake in the port to the state-owned Chinese company, and making the deal valid for 99 years, the Sirisena-Wickremesinghe regime has virtually handed over a huge national economic and strategic asset to a foreign company and a foreign country, he charged.

The Sri Lanka Ports Authority (SLPA) will lose its control over the port. The Sri Lankan navy, which is in charge of security in all Sri Lankan ports, will lose this role to the Joint Venture company in Hambantota port. Although the navy will be a member of the committee to ensure security, it will not be in-charge of security in the way in which it is now. Sri Lanka will not be able to get any dividend from the port for 15 years which is the time it might take to become commercially viable. Sri Lanka will also not be able tax the Sino-Sri Lankan Joint Venture company for 15 years.

Rajapaksa charged that government has plans to sell other ports at Kankesanthurai and Trincomalee to foreign powers and said that very soon there will be no need for a Sri Lanka Ports Authority. The former President also promised to take back all sacked workers if he comes to power.

Threatening a mass agitation against the deal over Hambantota and the proposed deal with India over a new terminal in Colombo port, JVP leader Anura Kumara Dissanayake said that the Hambantota Port could have been developed to earn massive revenue by offering services to ships and not restricting its role to transshipment.

“The world's main maritime routes run past the Hambantota Port and shipping passing through could have brought us huge earnings from bunkering, supplying food and water to ships and providing repair services. However, without taking that into consideration, the Rajapaksa government developed the Hambantota harbor for transshipment purposes only. According to the new agreement supply of fuel to foreign ships and gas storage are to be handed over to a Chinese company,” he said.

However, the Minister of Shipping and Ports ,Arjuna Ranatunga ,said that the “deal” with China is only a Framework Agreement “ or something like an MoU”. It is not the “Final Agreement” which is still being negotiated, he clarified. He further said that many changes could be made between now and January 8, 2017 when the Final Agreement is to be signed. He even stated that if the SLPA is not given the power to ensure security in the port, he will not sign the agreement.

But Ranatunga justified the deal with China by saying that it is the only way to develop Sri Lanka’s ports. So far, the profit-making Colombo port has been pumping funds into other ports to keep them afloat. But Colombo port’s finances have suffered in the process, affecting its development, he pointed out.

Impact on Sino-Lanka Relations

Political observers say that the controversies over Hambantota port will, in due course, sour relations between China and Sri Lanka. China was very upset when the Sirisena-Wickrmesinghe government stopped projects funded by China alleging corruption and high interest rates on loans. After several months of lay off, work resumed in many projects.But before normally could be fully restored, Hambantota port got embroiled in controversies in which China is being portrayed as a greedy and domineering power cynically making use of Sri Lanka’s financial and other vulnerabilities.

Previously, Rajapaksa was a friend of China’s. But today, he is not. It is possible that he may want the agreements signed by the Sirisena-Wickremesinghe government to be re-examined when he is voted back to power.

Sino-Sri Lankan relations may be heading for a period of uncertainty, if not turmoil, in the near and medium term.



http://www.newindianexpress.com/wor...al-with-china-on-hambantota-port-1549831.html

 

[HeinzGud]

Impact on Sino-Lanka Relations

Political observers say that the controversies over Hambantota port will, in due course, sour relations between China and Sri Lanka. China was very upset when the Sirisena-Wickrmesinghe government stopped projects funded by China alleging corruption and high interest rates on loans. After several months of lay off, work resumed in many projects.But before normally could be fully restored, Hambantota port got embroiled in controversies in which China is being portrayed as a greedy and domineering power cynically making use of Sri Lanka’s financial and other vulnerabilities.

Previously, Rajapaksa was a friend of China’s. But today, he is not. It is possible that he may want the agreements signed by the Sirisena-Wickremesinghe government to be re-examined when he is voted back to power.

Sino-Sri Lankan relations may be heading for a period of uncertainty, if not turmoil, in the near and medium term.

http://www.newindianexpress.com/wor...al-with-china-on-hambantota-port-1549831.html

Sin-Sri Lanka relations don't head for uncertainty with Rajapaksha. He went to China no more than few weeks ago for a high level meeting with Chinese government. Even China knows who wields real power in Sri Lanka. Currently, China is just mocking the Sirisena-Wickramasinge government for their anti-China policy.

Next year will be year of political turnaround due to the fact there are several elections scheduled. People have rallied around Rajapasksha led coalition. We can expect a change of government in the coming months. Which will be pro-China.

 

[HeinzGud]

Is there any trade activity in this port?

China itself is shifting its gears to become consumer driven economy these days.

Currently, vehicle carriers are docking in the port. When the remaining developments of the port is completed. There will be more ships which would you the port as a service hub. As for the far future, when the planned Economic zone of the H'tota area is activated; harbor will be used ship the goods to number of locations around the world.

 

[airtel]

Next year will be year of political turnaround due to the fact there are several elections scheduled. People have rallied around Rajapasksha led coalition. We can expect a change of government in the coming months. Which will be pro-China.

small countries Pay the Price of war between superpowers ...............example Syria ,Yemen , Iraq , Ukraine etc are Paying Price of US-Russia war .

now USA & China both are Going to Fight , they will not attack on each other but they will fight their wars in smaller countries ..................Like Philippines , Vietnam & may be Lanka .

 

[armyofhind]

Is Sri Lanka so keen like Pakistan in becoming China's Bitch?

 

[airtel]

Is Sri Lanka so keen like Pakistan in becoming China's Bitch?

no , only Rajapasksha is pro-china ..................Sirisena-Wickrmesinghe government is Pro India .