Sri Lanka’s government formally handed over control five months after the two parties signed an agreement under which the Chinese state-owned company has a 70 percent controlling stake in the port.
China Merchants Port Holdings has taken over commercial operations at the struggling Port of Hambantota on Sri Lanka’s southern coast, recently signing a 99-year lease under which CMPH is expected to pay just over $1 billion.
Sri Lanka’s government formally handed over control of the port to CMPH on Dec. 9, five months after the two parties signed an agreement under which the Chinese state-owned company will have a 70 percent controlling stake in the port.
The state-run Sri Lanka Ports Authority holds the remaining 30 percent.
Sri Lanka has already received a nearly $300 million initial payment from CMPH, and is expected to receive another 10 percent, or around $100 million, in January as well as an additional $585 million in six months, Sri Lanka Ports Minister Mahinda Samarasinghe has said.
“Today we received $292 million as the first tranche of the Hambantota Port joint venture. This is but the first step in realizing the true commercial value of the port after seven long years,” Samaraweera told his country’s parliament, as quoted by the Reuters news service.
The port, which opened in 2010, has struggled due to lack of commercial activity, something that the Sri Lankan government has said it hopes CMPH can overcome. Hambantota, which is near a main shipping route from Asia to Europe, is likely to play a major role in China’s $1 trillion “One Belt, One Road” infrastructure improvement initiative, which focuses on connectivity and cooperation between more than 60 European and Asian countries.
CMPH signs 99-year lease to run struggling Sri Lankan port
