The Rajapaksa regime borrowed $1320 million from the Chinese government for the construction of the Hambantota Port, but the Port Authority or the government did not have the ability to bring in ships to this port, Prime Minister Ranil Wickremesinghe said. The Prime Minister was making a Special Statement in Parliament yesterday on the New York Times investigative report.
“The government did not have the means or income to pay back this loan for a port that had no ships coming in. With no income the Colombo port had to shoulder the burden of the Hambantota port. From 2011 to date the losses from the Hambantota Port is around Rs. 47 billion, the Prime Minister Ranil said.
“Finding a solution to this issue was an election pledge of the Good Governance government. We had only two options, one was to determine that this agreement was unlawful and take the necessary action and the other was to discuss the matter with the Chinese government.We gave priority to the second option of discussing the matter and taking a decision. We discussed on how best to transform this white elephant into a profit making venture. Our motive was to turn this into a public private partnership which could generate revenue and get us out of the debt trap,” the Prime Minister added.
Responding to allegations in the New York Times that the Good Governance government was forced by China, he said: “I state with responsibility that our government was never pressurised by the Chinese government to hand over the port to them. We had many options and we could have followed whatever we wanted. They only requested us to initially call for proposals from Chinese companies. In response, we called for open tenders and the most profitable from those we received was from China Harbour Merchant Company. Their proposal was to create an industrial zone and they had the capability to bring in ships. They agreed on a $1080 million investment.”
Based on the agreement, on December 20, 2017 $ 293 million was paid to Sri Lanka and on January 28, 2018 $ 97 million was paid and the balance $ 584 million was paid to the Port Authority. A development plan for the setting up of an industrial zone has been completed and an LNG power plant has been approved.
The Prime Minister noted that several other investment applications had also been received by the Investment Board, adding that this was a great victory for the current government to be able to transform a shipless port into a productive port. “There has not been a sale of the harbour in any manner. Only the port operations would be carried out by a PPP.
The Hambantota harbour will transform into a developed harbour in the future. This harbour would definitely not be used for any war situation and we will not allow our lands nor ports to be used for any military or war purposes of any other country. This has been clearly stated in the agreement and we have also emphasized this point to the Chinese President and he had accepted it,” the Premier asserted.
With regard to the Mattala Airport, Prime Minister Wickremesinghe noted that initial discussions were held with the Chinese companies, but, not having a positive response, we are now in discussion with Indian companies. “I am confident that we would be able to transform the Mattala Airport into a profit making airport which brings in many aircraft. If China had pressured us, then we would have been compelled to hand over Mattala to them too. Sri Lanka negotiates and deals with India and China as an independent state,” the Prime Minister assured.
JO – MP Wimal Weerawansa said that despite the handing over of the Hambantota harbour to China Merchant and the government receiving payment for it, the Port Authority was still paying the loan repayment instalments, bearing the debt burden.
In response, the Prime Minister said: “This money had been deposited in our reserves and no matter who pays, the money is with us. Our debt has reduced and our reserves have appreciated. The New York Times article had two parts and I only responded to the part that was relevant to my government.”