Addressing India and other neighbours’ concerns on Chinese intrusion in the region, Sri Lankan Government on Tuesday revisited its pact with China over the stake in the Hambantota port. The pact was revisited by the Sri Lankan Cabinet after the Island Country witnessed large scale protests over the transfer of more than 15000 acres of land to the Chinese Company. Controversy erupted further when state-run China Merchants Port Holdings held 80 percent stake in the port after it built it by spending a whopping $ 1.5 Billion.
According to PTI report and other agency reports , India had expressed its concerns when a Chinese submarine was seen at the dock, giving rise to the speculation of its use for military operations. Under the new pact, Sri Lanka curtailed the commercial operations at the port. Cabinet Spokesperson Dayasiri Jayasekera said the pact was approved by the cabinet and it will be promulgated after Parliament’s approval. As per the new pact, China Merchants Port Holdings owned by China will have 85 percent in the port.
The docking of two Chinese submarines at the Colombo harbour in 2014 had angered India, which said it undermined its security interests. India had raised concerns with Sri Lanka over the growing Chinese influence in the island nation. During the former regime of Mahinda Rajapaksa, China funded Rajapaksa s massive infrastructure development projects with commercial loans for the construction of highways, air and sea ports.
His successor Maithripala Sirisena’s plan to handover equity to China as part of the loan settlement was met with resistance. As per the new pact, China Merchants Port Holdings will have an 85 per cent stake in Hambantota International Port Group. The group is entrusted with the duty to run the port and its terminals. Sri Lanka Ports Authority will own the rest of the stake. The company will be formed with a capital of $794 million.