‘Buy back’ clause in H’tota Port agreement

Finance Minister Ravi Karunanayake yesterday said that the government had included a ‘buy-back’ clause in the Hambantota Port agreement between the government and China Merchants Port Holdings to give the former some flexibility within the agreement.

He stated the above in response to a question posed by a journalist at a media briefing yesterday, over the statement that the Chinese side was not happy with the structure of the agreement.

“The perception is that we had outright sold 15,000 acres of the country, which is not the case. It was the investment that came in that requires such. Though we have said we would offer a 80 percent stake, we will also retain the option to buy back some when the opportunity arises”, said Karunanayake. He further explained that the government did not have the capital required for complete public investment at the Port and hence they had no choice but to go for a public-private partnership.

“The Port will start as soon as the go ahead is given.

We are at the concluding phases of the negotiations”, said the Minister who added that Cabinet approval for the agreement had already been granted. Media reports this week however reported that the Chinese interests in Hambantota Port could be delayed by several weeks or months as the Chinese have stated that they would only sign the deal if the 15,000 acre industrial zone comes with it. The Chinese plan to invest US$ 5 billion to develop the area within 3-5 years.

Port unions and residents in the area have voiced strong objections to the industrial zone and the sale of the Port with some going to courts to put a halt to the lease of the lands. Hambantota port and Air Port was built in 2008 by former President Mahinda Rajapaksa’s government with the help of US$ 1.7 billion in Chinese loans.

 


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