Sri Lanka and China to amend agreement on southern port

By APD writer Easwaran

COLOMBO,15 Nov. (APD) -- Sri Lanka and China are to amend and agreement on operating a key port in the south of the country, the Sri Lankan government said on Wednesday.

The Hambantota port agreement is to be further amended and cabinet approval has been obtained to sign the amended agreement.

Cabinet spokesman Gayantha Karunatillake said that the amended agreement will ensure Sri Lanka obtains the agreed investment of the project much earlier.

On 25th July 2017, China Merchants Port Holdings Company Limited (CMPort), Sri Lanka Ports Authority (“SLPA”), the Government, Hambantota International Port Group (Private) Limited (“HIPG”) and Hambantota International Port Services Company (Private) Limited (“HIPS”) had agreed on the terms of the Concession Agreement in relation to the development, management and operation of the Hambantota Port.

In the signed agreement CMPort agreed to invest an amount of up to USD 1,120.00 million into the Hambantota Port and Hambantota port and marine-related activities.

Of this the total amount is to be paid to SLPA for the acquisition of the 85% issued share capital of HIPG is USD 973.658 million (and HIPG shall use a portion of such amount to acquire 58% issued share capital of HIPS) and the remainingUSD146.342 million (equivalent to approximately HKD1,141.47 million) is to be deposited into a bank account in the name of the Company in Sri Lanka and will be utilised for such Hambantota port and marine-related activities as may be agreed with the Sri Lankan Government within one year from the final payment of capital injection in HIPG.

The Port of Hambantota is located on the Southern coast of Sri Lanka occupying a prime location within 10 nautical miles to the main shipping route from Asia to Europe and is also in a strategic position along the “Silk Road Economic Belt and the 21st Century Maritime Silk Road”.

(ASIA PACIFIC DAILY)