Sri Lanka Minister says pushing for better terms in port sale to China
Dec 15, 2016 08:49 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Sri Lanka's Ports Minister Arjuna Ranatunga says he is still pushing to win more favourable terms for the sale of Hambantota Port to China, with deal to be wrapped before January 07.
Sri Lanka is planning to sell an 80 percent stake in Hambantota Port to China Merchant Port Holdings (formerly China Merchants Holdings (International) Company Limited), for 1.12 billion US dollars.
Sri Lanka has spent about 1.4 billion US dollars in loans and interest from China to build the port.
A framework agreement was signed on December 08.
A special purpose vehicle that will hold a 99-year lease on the port will get a 99-year concession to build and operate the port. Sri Lanka Ports Authority (SLPA) will hold a 20 percent stake in the firm.
Ranatunga told reporters China has asked for 198 years, but he prefers a period like 50 years. Terminals in Colombo port has been leased on a concessions of around 35 to 50 years.
But the Hambantota Port will be leased on its entirety.
According to published reports on the framework agreement, CMPort will not pay any concession fees upfront or pay throughput charges until some indeterminate date in the future.
Ranatunga said SLPA was still negotiating the terms of the concession agreement and was pushing for better terms.
The Hambantota Port's loans has become a burden on Sri Lanka Ports Authority, dragging down the development of Colombo hub and its other activities, Ranatunga said.
China, which is building new trade routes to its country, sees value in the port. (Colombo/Dec15/2016)