Ports and Shipping Minister Mahinda Samarasinghe on Saturday said the concession agreement on the Hambantota Port signed with the China Merchant Port Holdings on Saturday has significantly reduced the burden of the government over the debt payments for the Hambantota Harbour.
Minister Samarasinghe, speaking at the agreement signing ceremony noted that the harbour construction was carried out after obtaining a commercial loan amounting to Rs.193 billion.
The Hambantota Port commenced its commercial operations from November 2011 and as end of 2016 the accumulated loss is over Rs. 46.7 billion.
“The annual loan repayment commitment for SLPA is around Rs.09 billion,” the minister added.
He said due to this 90 percent of the revenue of the SLPA had to be set aside for debt payment.
“If we take off the car carriers which was forced to shift from the Port of Colombo to Hambantota, the number of ships handled in year 2015 was only 19 and in year 2016 it was 14 and from January to June 2017, the number was only 10,” he added.
The Minister explaining the dividends of the new agreement further noted that in the earlier agreement the, Treasury was not entitled to receive any revenue from the investment but according to the new one the Treasury will directly receive a sum of US$ 1.12 billion. Minister Samarasinghe also said that as per a clause included under the instructions of the President Maithripala Sirisena any clause of the agreement can be changed at any stage with the consent of both the parties.
Meanwhile, Minister Mangala Samaraweera said that in addition to the US$ 1.12 billion further US$ 600 million will be spent to modernise the Hambantota harbour. He said the area surrounding the port will experience unprecedented development and the whole country in general will reap its benefits.
Samaraweera noted that 300,000-400,000 direct and indirect employment opportunities will be generated.
The Minister further said that investors, not only from China, but also from India, Europe, Japan and other countries will be provided opportunities to invest.