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MR says H’tota port deal worst choice for country

Comments / 859 Views / Wednesday, 11 January 2017 00:08

 60Former President 

Mahinda Rajapaksa

  • Gives cost breakdown of $ 1.3 b port and three options before Govt.
  • Says he planned to use Colombo Port East container terminal profits to pay loan interest 
  • Charges China Habour made better offer but this was not considered by Govt.
  • Questions logic of giving 15,000 hectares of land to Chinese, "cautions about environmental fallout of potential projects 
  • Says all previous deals for royalty charges and investment agreements ignored        

Former President Mahinda Rajapaksa yesterday called on the Government to address the sincere concerns of villagers caught up in the Chinese investment zone and charged that the current administration was picking the worst of three options to make the $ 1.3 billion port a viable asset for Sri Lanka. 

In a statement, Rajapaksa said his administration had a plan to funnel profits from the East container terminal of the Colombo Port to cover loan costs of the Hambantota harbour. He also insisted that under his Government an agreement had been signed with China Merchant and China Harbour had made a joint proposal to run terminals in the port after bringing cranes and equipment on a 40-year supply operate transfer deal.

The port would be paid $ 35,000 per hectare per year for 56 hectares of the container terminal ($ 1.96 million), a royalty of $ 2.5 million for every container unloaded, wharf rage of $ 30 per container for cargo coming into Sri Lanka and other charges for navigation and piloting.

He also alleged that China Harbour Engineering Company had made an alternative proposal to take 65% of the port for $ 750 million on a 50-year concession and pay some royalties, but the proposal had been rejected by the current administration, which had preferred China Merchant Holdings’ offer of an 80% stake for 99 years at a cost of $ 1.12 billion. 

“A 99-year lease impinges on Sri Lanka’s sovereign rights because a foreign company will enjoy the rights of the landlord over the 2,000 hectare free port while operating the entire harbour as well," he said.

 "This is not an issue with China or with foreign investors. It is about getting the best deal for Sri Lanka. The agreement that my Government negotiated with both China Harbour Co and China Merchant Co to manage the Hambantota container terminal for 40 years is the best deal yet. The bid made by China Harbour Co for a 50 year lease is obviously more favourable than the bid made by the other company,” Rajapaksa claimed in a statement.

“As a matter of principle, I am against the leasing of the entire harbour for 99 years and giving the rights of the landlord over the industrial zone to a foreign private company. The industrial zone and the harbour should be controlled by the Ports Authority while harbour operations may be given on management contracts to the private sector. For example, the Colombo Port is run by the Port Authority and two private operators. The Port Authority has full control over the Colombo harbour as well as equity in the two privately run terminals. I believe this should be the approach to the Hambantota Port as well.”

The former President also questioned as to why the Government was prepared to handover 15,000 hectares when the relevant Chinese authorities had failed to detail how they would use the land in the existing 2,000 hectares and pointed out the dedicated Chinese investment zone would be larger than all other zones under the Board of Investment (BOI) combined. 

“Apart from the entire Hambantota free port, the Government has decided to lease a further 15,000 acres outside the free port to a foreign company for 99 years. In a situation where even the 2,000 hectares within the free port have not been utilised yet, on what grounds can we justify the leasing of another 15,000 acres to a foreign company? The total land area of all the Board of Investment economic zones in the country at present put together do not amount to 2,000 hectares. A 15,000-acre zone in Hambantota will be disproportionate to our country’s economy. 

“Furthermore, the disruption caused to the people of the area will be immense if 15,000 acres of land were to be acquired for this purpose. The Government should fill the free port with investments first before opening more zones. Furthermore, the Government should have supervision over the kind of factories that will be opened in these industrial zones, the fuel they use and the waste they produce. My Government agreed only to the use of LNG gas, even though some potential investors wanted to use coal.”

“This is not an issue that can be resolved by baton-charging or tear gassing protestors or having them assaulted by thugs and remanded. There are real issues relating to the financial benefits that will accrue to the country from this deal and issues of control and sovereignty over the free port and possible environmental issues that need to be addressed,” he added. 

Rajapaksa also charged that the Government had picked the worst of two offers made by two Chinese State-run companies, pointing out that the current decision to hand over the port for 99 years would leave Sri Lanka with limited revenue streams.

See full statement on Page 13

China seeks clarification from 

ex-President on opposition to deal


China has sought clarification from former President Mahinda Rajapaksa on his opposition to the new Hambantota port deal.

The Chinese Ambassador to Sri Lanka, Yi Xianliang, met Rajapaksa yesterday and discussed matters related to the Hambantota Port.

The meeting took place at Rajapaksa’s official residence and Rajapaksa’s office said that he informed the Chinese envoy that the opposition could not agree to the proposal to allocate 15,000 acres of land in Hambantota to a foreign country. (Colombo Gazette)



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