The agreement to lease the Hambantota port to a Chinese company was signed yesterday between Sri Lanka Ports Authority (SLPA) and China Merchant Holdings Company Ltd., (CMHC).
The signatories to the amended agreement were Chairman of SLPA, Dr. Parakrama Dissanayake, Secretary to the Ministry of Ports and Shipping; L. P. Jayampathi and the Managing Director of CMHC Dr. Bai Jingtao.
Announcing the signing of the US$1.4 billion deal which entails restructuring of the southern Hambantota port the Premier said on Friday that this can be considered as giving the country a better deal without debt.
Two companies that will be established under the restructuring process will include Hambantota International Port Service Ltd. Where 50.7 percent of its ownership will be held by Sri Lanka Ports Authority and 49.3 percent of the ownership will be held by China Merchant Port.
The other company; Hambantota International Port Group (Pvt) Ltd, of which 15 percent of the ownership will be held by SLPA and the remaining 85 percent by China Merchant Port.
The lease period is 99 years, at the conculsion of 70 years SLPA will have the right to purchase the complete shareholding or at the conclusion of 80 years, SLPA will have the liberty to purchase 76.8 percent of Hambantota International Port Service Ltd and 60 percent of Hambantota International Port Group (Pvt) Ltd for a consideration of Us $ 1b. Under the agreement all ownership and rights pertaining to national security will remain with the Sri Lankan Government. The signing ceremony took place with the patronage of Ministers Malik Samarawickrema, Mangala Samaraweera, Dr. Sarath Amunugama, Arjuna Ranathunga and Nishantha Muthuhettigama.