CM Port pays final $ 584 m for H’tota Port

Symbolising the payment of $ 584,194,800 to Sri Lanka Ports Authority as the final tranche of the Public-Private Partnership (PPP) investment for Hambantota Port. From left: SLPA Executive Director Nilan A. S. Wickramasinghe, CICT Legal Counsel Mohan Wijesinghe, CICT CEO Jack Huang, HIPG COO Tissa Wickramasinghe, China Merchant Group in Sri Lanka Chief Representative Ray Ren, SLPA Chairman Dr. Parakrama Dissanayake, SLPA Additional Managing Director A. D. T. Gunasekara, SLPA Director (Finance) Shirani Wanniarachchi, and Private Secretary to the Ports and Shipping Minister Sean Samarasinghe

The final tranche of payment for the Hambantota Port joint venture was released by China Merchant Port Holdings Limited (CM Port) yesterday. 

The cheque was handed over to Sri Lanka Ports Authority (SLPA) Chairman Dr. Parakrama Dissanayake by the of China Merchant Group in Sri Lanka Chief Representative Ray Ren, in the presence of senior port officials and representatives of CM Port. 

This marks the single highest ever Foreign Direct Investment (FDI) received by Sri Lanka to date. 

In view of the urgent need for viable and efficient operation of the Hambantota Port, Sri Lanka Ports Authority (SLPA) and the Government of Sri Lanka, on the direction and leadership of Ports and Shipping Minister Mahinda Samarasinghe under the guidance of the President and Prime Minister, entered into the Concession Agreement with China Merchant Port Holdings Limited of Hong Kong in July last year for management, operation and development of Hambantota Port on a Public-Private Partnership model.  This third final tranche in the amount of $ 584,194,800 follows the first tranche released in December 2017 and the second tranche released in January this year, in amounts of $ 292 million and $ 97 million respectively. With this payment, CM Port fulfils the $ 976 million investment value 1 of the port concession. In the terms of the Concession Agreement, CM Port has agreed to deposit a further sum of $ 146 million, being investment value 2, to be utilised for port and marine related activities. 

On 9 December 2017, two Sri Lankan companies established under the concession agreement, namely, Hambantota International Port Group (HIPG) and Hambantota International Port Services Co. Ltd. (HIPS) officially took over the Hambantota Port, thereby making the concluded concession agreement effective.

“CM Port is one of the most successful global companies in the ports sector, and their investment in the Hambantota Port can be described as a credible vote of confidence in its potential as well as in the economy of Sri Lanka,” said SLPA Chairman Parakrama Dissanayake.

The two companies established in Hambantota plans further to invest an additional $ 400 million to $ 600 million on phase I and II of the Hambantota Port. These investments will attract many other foreign investors to the country, making Sri Lanka a pivotal maritime and logistics centre.

During the year 2017, Colombo Port was ranked as the 23rd largest container Port and 13th best connected Port in the world. SLPA also recorded a net profit of Rs. 13.2 Billion in 2017, as against a net profit of Rs. 1 Billion achieved in 2016 .With transhipment volumes in the Colombo Port during the first 05 months of 2018 increasing by 19.2% as against 2017, and Jaya Container Terminal (managed by SLPA) recording a transhipment growth of 21% during the aforesaid period, the conclusion of the Concession Agreement of Hambantota Port would further enhance the profitability of SLPA.