Colmbo: Sri Lanka’s cabinet cleared a revised agreement for its Chinese-built southern port of Hambantota yesterday, the government said, after terms of the first pact sparked widespread public anger in the island nation.
The port, close to the world’s busiest shipping lanes, has been mired in controversy ever since state-run China Merchants Port Holdings , which built it for $1.5bn, signed an agreement taking an 80 percent stake.
Chinese control of Hambantota, which is part of its modern-day “Silk Route” across Asia and beyond, as well as a plan to acquire 15,000 acres (23 sq miles) to develop an industrial zone next door, had raised fears that it could also be used for Chinese naval vessels.
Sri Lankans demonstrated in the streets at the time, fearing loss of their land.
Details of the new agreement have not yet been made public. But according to parts of the document seen by Reuters, two companies are being set up to split the operations of the port and allay concerns, in India mainly but also in Japan and the United States, that it won’t be used for military purposes.
China Merchants Port Holdings will take an 85 percent stake in Hambantota International Port Group that will run the port and its terminals, with the rest held by Sri Lanka Ports Authority. The company’s capital will be $794m.
A second firm, Hambantota International Port Group Services Co, with capital of $606m, will be set up to oversee security operations.
