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The Strategic Hambantota Port comes formally under Chinese umbrella

The final tranche of investment for the Hambantota Port lease was released by China Merchant Port Holdings Limited (CM Port) on June 20 overcoming the differences between China and the island nation over control of certain islands near the Port. Hambantota situated at the strategic southern tip of the island has come under the control of the Chinese company according to reports in the Sri Lankan Meida..

The cheque for 584,194,800 USDollars was handed over to the Chairman of Sri Lanka Ports Authority (SLPA) Parakrama Dissanayake by the Chief Representative of China Merchant Group in Sri Lanka Ray Ren in the presence of senior port officials and representatives of CM Port. This is the single highest ever Foreign Direct Investment (FDI) received by Sri Lanka to date.

 With this payment CM Port fulfills the USD 976 million investment value 1 of the port concession and in terms of the Concession  Agreement, CM Port has agreed to deposit a further sum of USD 146 million being investment value  to be utilised for port and marine related activities.

In view  of urgent need for viable and efficient operation of the Port of Hambantota, Lanka Ports Authority (SLPA)  and the Government of Sri Lanka 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 Public Private Partnership model,

On 09th December last year two Sri Lankan companies established under the concession agreement namely, Hambantota International Port Group (HIPG) and Hambantota International Port Services Co. (Pvt) 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 Port of Hambantota can be described as a credible vote of confidence in its potential as well as in the economy of Sri Lanka," said Chairman SLPA Parakrama Dissanayake.

 The two companies established in Hambantota plans further to invest an additional US$ 400 million to US$ 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, Port of Colombo 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 transshipment volumes in the Port of Colombo during the first 5 months of 2018 as against 2017 increasing by 19.2 per cent and Jaya Container Terminal managed by SLPA recording a transshipment growth of 21 per cent during the aforesaid period, the conclusion of the Concession Agreement of Hambantota Port would further enhance the profitability of the Sri Lankan Port Authority.

 

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