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What is there to change in the Hambantota port agreement? asks Chinese ambassador

Chinese Ambassador to Sri Lanka Yi Xianliang says that he will seek clarifications from President Maithripala Sirisena on what changes he wanted to the Hambantota Port Agreement." It is a business agreement signed by Sri Lanka and China. How can a signed agreement be altered now" the Chinese ambassador said adding he will seek clarification from the Sri Lankan President according to Sri Lankan Media reports

Asked if China would accede to President Sirisena’s request to amend the recent Hambantota Port agreement between the Sri Lanka Ports Authority (SLPA) and China Merchants Ports Holdings (CMPH), he said that it was a business agreement. "It has already been signed by both sides. So, how do we alter it? Anyway, I will have to ask President Sirisena what provisions he wants changed."

Under the agreement, the Hambantota port operations would be entrusted to two joint ventures (JVs). The Chinese firm would hold 85 percent of shares in the JV established for handling terminal operations while the SLPA would hold 50.7 percent of the shares in the JV for common user facility operation. In return, the Chinese firm would pay 1.1 billion US Dollars upfront to Sri Lankan Port Authority.

Twenty per cent of ownership of the port can be bought back by Sri Lanka within the first 10 years. In 70 years of agreement, Sri Lanka can buy back all shares on a fair value and take over the majority control.

The deal was made during former President Rajapakshe’s regime. The present government came to power on the promise that they would make changes in the Hambantota port agreement. India also has reservations about Chinese firms’ ownership of the strategic port. Two years ago, a Chinese nuclear submarine docked at the port creating a storm in the strategic military circles.

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