A look back: Hambantota Port Deal

COLOMBO (News 1st): In the face of the proposed agreement with India to call for investment into the Eastern Terminal at the Colombo Port, let's take a look back at the handing over of the Hambantota Port to China. In 2008, the Mahinda Rajapaksa government commenced work on the Hambantota Port with 85% of the funds coming from the EXIM Bank of China. The remaining 15% came from the Sri Lanka Ports Authority. The Exim Bank provided a loan of 307 Million USD to Sri Lanka for the first phase of the Hambantota Port at a high-interest rate of 6%. As the expected income could not be earned from the operating the Hambantota port, a decision was then reached to lease the Hambantota port for 99 years to China Merchant Port Holdings for USD 1.12 billion. An allegation was raised that China held majority shares of the company that earned a profit under this agreement and Sri Lanka held a majority shares of the company that provided services at the port. The current Government strongly opposed the decision by the Government at the time.