Colombo gives the port of Hambantota to Beijing, but tries to please India and the United States
China Merchants Port Holdings will hold an 85 per cent stake in the port. A second firm, 50.7 per cent owned by Sri Lanka, will oversee security operations. Local residents are afraid of losing their lands. India, the United States, and Japan are concerned about a naval base.
Colombo (AsiaNews) – The Sri Lankan government has inked an agreement with China for the use of Hambantota as a port facility, but denied China total ownership, meeting concerns expressed by the United States and India.
The decision comes after months of protests and demonstrations by local residents afraid that they would be forced out to make room for Beijing's megaprojects.
With this decision, Sri Lankan authorities have tried to allay some of the concerns voiced by India, Japan and the United States over the possible use of the port as a military base for Chinese ships. Under the agreement, the port will be restricted to commercial operations.
The facility is part of a series of infrastructural developments in China’s ‘One belt, One Road’ strategy, which includes a chain of ports, highways, and railways across South and Central Asia to export Chinese goods to the heart of Europe.
At the centre of the dispute are 15,000 acres to be given to China to build an industrial zone next to the new port. Once the news was made public, local residents reacted immediately negatively, expressing their opposition to becoming a Chinese colony and especially to the loss of their land.
Several politicians have also come out against the plan, viewing it as a loss of national sovereignty.
Based on the agreement signed by the government on Tuesday, which goes before parliament next week, the area would be divided between local and Chinese companies.
China Merchants Port Holdings CO (CMPort) will hold an 85 per cent stake in Hambantota International Port Group, which will run the port and its terminals, whilst the rest will be held by the Sri Lanka Ports Authority. CMPort’s share is estimated at US$ 794 million.
A second firm, Hambantota International Port Group Services Co, with capital of US$ 606 million, will oversee security operations, with the Sri Lankans holding a 50.7 per cent stake and the Chinese 49.3 per cent.
Despite Colombo's decision, greeted by some as a success for withstanding Chinese expansionism, a number of experts remain doubtful.
Although CMPort agreed to reduce its stake to 65 per cent after 10 years, many doubt that Beijing will really give up control.
Apart from the 99-year concession term, CMPort got the Sri Lankan government and ports authority to agree that for 15 years no other development of any port or terminal directly in competition with the services and businesses of Hambantota Port will be allowed within a 100-km perimeter.