Hambantota port made profits in 2014, 2015

Former President Mahinda Rajapaksa says the Hambantota port had made operating profits in 2014 and 2015.

Rajapaksa says the loans taken for the construction of the harbour were 450 million USD for the first phase, 70 million USD for the bunkering facility and 802 million USD for the second phase bringing the total to around 1,322 million USD.

When complete the harbour would have had four terminals and 12 berths. This was meant to be a free port covering an area of 2,000 hectares where goods could be manufactured or value added and shipped overseas.

“All the necessary feasibility studies were done before these loans were taken and the annual interest plus capital repayments would amount to about 111 million USD. My government had planned to raise that money through the Ports Authority itself,” Rajapaksa said.

Rajapaksa says the new Government made some unwise decisions with regards to the Hambantota port, including disregarding the management contract for the Hambantota container terminal entered into by his Government with China Harbour Co and China Merchant Co.

“The Government said the Hambantota port was a white elephant and that it had to be privatised to raise the money to pay off the loans taken to build it. They called for bids, not just for harbour operations but for the rights of the landlord over the entire 2,000 hectare free port so that whoever takes the long lease will operate the entire harbour and have complete control over the industrial zone as well. The two companies China Harbour Co and China Merchant Co which made a joint proposal to lease out the Hambantota container terminal for 40 years during my Government are the same companies that have made rival bids to lease the entire free port under the present Government,” he said.

Rajapaksa says the 99 year lease agreement the Government has reached with the Chinese company impinges on Sri Lanka’s sovereign rights because a foreign company will enjoy the rights of the landlord over the 2,000 hectare free port while operating the entire harbour as well.

“This is not an issue with China or with foreign investors. It is about getting the best deal for Sri Lanka. The agreement that my Government negotiated with both China Harbour Co and China Merchant Co to manage the Hambantota container terminal for 40 years is the best deal yet. The bid made by China Harbour Co for a 50 year lease is obviously more favourable than the bid made by the other company. As a matter of principle, I am against the leasing of the entire harbour for 99 years and giving the rights of the landlord over the industrial zone to a foreign private company. The industrial zone and the harbour should be controlled by the Ports Authority while harbour operations may be given on management contracts to the private sector,” he said.

Rajapaksa says there are real issues relating to the financial benefits that will accrue to the country from the new Hambantota port deal deal, and issues of control and sovereignty over the free port and possible environmental issues that need to be addressed.