Rajapaksa regime borrowed Rs. 183 billion to build Magampura Port but debt servicing hit crisis level with Rs. 9 billion loss per annum since 2014; Revenue only Rs. 2 billion per year
Malik and Ravi say Rajapaksa and Joint Opposition have no right to oppose new investment, exports and job creation after putting country in debt trap and weakening the economy
Accuse Rajapaksa regime of selling acres of prime land in Galle Face and Hambantota; new deal by Govt. is on lease with highest investment to make deep south port commercially viable
Reveal around 3,000 families were displaced by Rajapaksa regime to make way for port, airport and cricket stadium in Hambantota and all ventures are a burden on people forcing higher taxation
$ 1.4 billion CMPort and SLPA joint venture investment will have only around 1,200 acres of land in and around port for related facilities and industries
Separately 15,000 acres earmarked from four districts for export-oriented
ventures by global investors in special
economic zones to be developed by Chinese firm
Hambantota Port’s new deal still being negotiated with Concession, Shareholder and Lease agreements pending and likely to be finalised this month
New ministerial committee comprising Dr. Amunugama, Arjuna, Nimal, Malik, Ravi and Sagala to oversee final negotiations
By Nisthar Cassim
The Government yesterday fired back at the Joint Opposition for what Ministers described as damn lies and crocodile tears over the new and crucial $ 1.4 billion revival deal for the Hambantota Port with China Merchant Port (CMPort).
Development Strategies and International Trade Minister Malik Samarawickrama and Finance Minister Ravi Karunanayake literally shot down each of the criticisms and allegations against the Government’s initiative and emphasised that the Joint Opposition, influenced by MP and former president Mahinda Rajapaksa, was misleading the people for petty political gain.
“It is Mahinda Rajapaksa who pawned the country with expensive debt and weakened the economy. It is Mahinda Rajapaksa who evicted hundreds of families previously to build the Hambantota Port, the Mattala Airport and Sooriyawewa Cricket Stadium. It is the Rajapaksa Government which sold prime land in Galle Face to Shangri La and 125 acres in Hambantota. Today they are opposing our efforts to ensure commercial viability of the Hambantota Port, generate jobs and reduce the debt burden on the people,” Minister Karunanayake charged.
“The Joint Opposition is bankrupt. The Rajapaksas and Aluthgamages who are being investigated for bribery and corruption have no right to accuse the Government of the same when the best possible terms are being negotiated for the Hambantota Port,” the Finance Minister emphasised.
He and Minister Samarawickrama put the crisis faced by the Government on account of the Hambantota port in context. The Rajapaksa Government borrowed $ 1.3 billion or Rs. 183 billion to build the Hambantota Port with no revenue plans. Interest rates of loans ranged between 2% and 7.5%. The operational loss of the Hambantota Port was more than a staggering Rs. 9 billion per year since 2014 whereas revenue has been Rs. 2 billion per annum.
“As a responsible Government we had to find a solution to arrest this situation rather than imposing taxes on the people to repay the debt of a loss-making venture,” said Minister Samarawickrama, who added that President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe visited Beijing to seek China’s intervention. The Chinese Government requested the Hambantota Port builder China Harbour and CMPort, one of the world’s best port operators, to get involved in the revival process.
“China Harbour valued the Hambantota Port at $ 1.1 billion and CMPort valued it at $ 1.4 billion. The bids were evaluated by a Committee of Secretaries, discussed and debated and approved by the Cabinet Committee on Economic Management (CCEM) and the Cabinet, after which the Framework Agreement was signed,” Minister Samarawickrama revealed.
Though Cabinet spokesman Minister Rajitha Senaratne on Wednesday said agreements for the new arrangement for the Hambantota Port would be signed on Saturday, Minister Samarawickrama said it was not so but three more agreements have to be negotiated and finalised before the handover. These include the main concessional agreement, the shareholders agreement for the CMPort (80%) and SLPA (20%) joint venture and the 99-year lease agreement. “Both parties are trying to negotiate the best deal possible and this will take a week or two,” he added.
On Wednesday night a decision was made to appoint a high-powered ministerial committee to discuss and approve final agreements. It is chaired by Special Projects Minister Dr. Sarath Amunugama and comprises Ports and Shipping Minister Arjuna Ranatunga, Transport Minister Nimal Siripala de Silva, Finance Minister Ravi Karunanayake, Development Strategies and International Trade Minister Malik Samarawickrama and Interior and Southern Development Minister Sagala Ratnayake. This committee will consult both the SLPA and CMPort on the way forward.
Samarawickrama and Karunanayake categorically stated that the deal with CMPort involves only land spanning around 1,200 acres in and around the Hambantota Port for various related industries involving the dockyard, bunkering, refinery, cement plant, etc. and not 15,000 acres as alleged by the Joint Opposition.
“That area of land is only being earmarked to be sourced from different parts of four districts in the Southern Province for economic zones to be designed by China Harbour for local and global investors keen on setting up export ventures which in turn will enhance the commercial viability of the Hambantota Port, create jobs and income for the people in the area and elsewhere,” he said.
He also said no houses or religious places or families would be destroyed or displaced as 95% of the land earmarked was owned by the state. The rest will be sourced from owners of private land if they are willing to sell.
Minister Karunanayake said it was the Rajapaksa regime which evicted over 1,500 families for Phase One of the Hambantota Port and a further 1,000 families for Phase Two. Furthermore, around 600 families were relocated to make way for the Mattala Airport and 15 families for the Sooriyawewa Cricket Stadium. “All these ventures are a burden to the Treasury thereby the people because of low or a lack of revenue,” Finance Minister added.
He also said it was under the Rajapaksa regime that land in the Colombo Port was given to China Merchant for the CICT Terminal and Rajapaksa was in the Cabinet when another terminal was privatised to SAGT. “As against 15% stake for SLPA in both these instances, we have succeeded in increasing it to 20%,” the Finance Minister added.
Samarawickrama said the lease agreement would be with the Sri Lanka incorporated joint venture company with SLPA as a shareholder whilst national and competitive interests will be ensured by a port regulator. He said the actual investment by CMPort would be higher since a further $ 600 million was required to equip Hambantota to handle container ships.
The Finance Minister said $ 1.12 billion from CMPort for an 80% stake in JV will be used by the Government to retire the more expensive debt incurred under the Rajapaksa regime.