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Sri Lanka scales back Hambantota port deal with China

Sri Lanka's Cabinet approved the sale to a Chinese firm of a 70 per cent stake in the strategically-located Hambantota…

Sri Lanka scales back Hambantota port deal with China

Port (Photo: AFP)

Sri Lanka's Cabinet approved the sale to a Chinese firm of a 70 per cent stake in the strategically-located Hambantota port, tweaking the deal after the initial agreement sparked protests.

Parliament will debate the $1.12 billion-deal on Friday and formally enter it over the weekend, Ports Minister Mahinda Samarasinghe said.

State-owned China Merchants Port Holdings will have a majority stake in the port, he said.

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The Chinese will manage port operations and Sri Lanka will handle port security, the minister said, indicating that it should allay fears that the port could be misused by the Chinese.

"Security of the port will not be given to anyone else.

It will be handled 100 per cent by Sri Lankans," Samarasinghe said.

His comments are being seen as an attempt to allay Indian concerns over the Chinese presence in the Hambantota port.

India perceives it as a danger to its national security.

The Maithripala Sirisena government had earlier faced public protests over handing over 15,000 acres of land for a Chinese industrial park in Hambantota. There were violent protests in the area as the local people refused to part with their land.

Earlier, the Sri Lankan government had planned to offer an 80 per cent stake to the Chinese firm, media reports said.

In 2014, New Delhi had protested to Colombo when a Chinese submarine called at the Colombo Port where Sri Lanka is currently developing a financial centre on the Chinese assisted port city project.

Samarasinghe said no favours would be granted to China.

"We will not provide special treatment to any country. We want to maintain good relations with all and we don't want to antagonise anyone." 

The announcement came as petroleum workers stopped work at midnight on Monday, opposing the deal at Hambantota and the proposed lease of oil storage tanks in the eastern district of Trincomalee to India.

Long queues were seen at fuel stations with fuel distribution coming to a halt.

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