Sri Lanka unveils special zone to attract Chinese industries
Jan 07, 2017 16:09 PM GMT+0530 | 1 Comment(s)
ECONOMYNEXT - Prime Minister Ranil Wickremesinghe and ambassador Yi Xianliang launched a special industrial zone in Hambantota yesterday hoping to attract $5 billion in Chinese investments despite protests by opposition politicians and monks.
The Prime Minister and the Chinese envoy unveiled a plaque marking the "Sri Lanka - China Logistics and Industrial Zone" in Hambantota as part of efforts to turn around the loss-making deep-sea port.
Just before the VVIP guests arrived at the nationally-televised ceremony, hundreds of protesters defied a court ban and tried to storm the venue and were blocked by police, including special task force commandos.
As protesters pelted stones, police used teargas and water cannon to push back the mobs led by Buddhist monks bussed in by nationalist groups supportive of former president Mahinda Rajapaksa.
Dozens were wounded when protesters pelted stones, a police official said adding that there were running street battles with mobs.
Residents argue that they will loose their land when industries are established, a charge denied by the authorities who say 95 percent of the land allocated for the zone came from state-owned real estate. The balance would be bought from private owners and there will be no forced acquisitions.
Chinese ambassador Yi said the zone could generate up to 100,000 jobs and benefit the residents of Hambantota as well as the rest of the island.
"In the next two to five years, if everything is OK, there will be about $5 billion of (Chinese) investments in this zone," Yi said adding that 100,000 new jobs were envisaged.
Prime Minister Wickremesinghe said creating the special area for Chinese investors was aimed to making the debt-burdened Hambantota port viable.
"The Hambantota port was going to sink us (Sri Lanka), but we are now trying to leverage it to create new economic activity and boost growth," Wickremesinghe said.
Last month, the government announced plans to sell part of its loss-making $1.4 billion Hambantota harbour to create a joint venture with China Merchant Port Holdings and help pay off crippling debts.
Negotiations are underway with China Merchant to transfer an 80 percent stake in the Hambantota port on a 99-year lease with an additional $600 million investment to set up gantry cranes and other equipment.
Officials have said Colombo hopes to raise about $1.12 billion from the share transfer to China Merchant and the cash could be used to retire high interest foreign loans.
The new government, which came to power in January 2015, has been trying to renegotiate terms of its $8 billion Chinese debt, which includes the construction costs of the Hambantota port as well as a nearby international airport which is used by only one airline.
The former administration relied heavily on China to build ports, highways and railways as Western nations shunned it over its dismal human rights record. (COLOMBO, January 7, 2017)