Sri Lanka Sells China Majority Stake in Strategic Indian Ocean Port

Sri Lanka has signed a $ 1.1 billion deal with a Chinese company to sell a majority stake in a controversial deep port in a bid to slash debt and says it has addressed concerns that China could use the port for military purposes.

The deal was signed after months of renegotiation following strident opposition to the project. While critics at home warned that handing majority control to the Chinese threatens national security, neighboring India fretted about China gaining access to a strategic port in its immediate neighborhood in the Indian Ocean.

Built with a massive loan by China in 2010, the Hambantota port is seen as key to Beijing’s ambitious Belt and Road initiative that aims to connect roads and ports across Asia and Europe and to its efforts to shore up its presence in the Indian Ocean.

The Sri Lankan government says that under the terms of the deal, Sri Lanka’s navy will handle the security of Hambantota port and no foreign navy will be allowed to use it as a base.

“We are giving the country a better deal without any implications on security,” Prime Minister Ranil Wickremesinghe told reporters.

The Chinese stake in the project has also been scaled back from 80 per cent to 70 per cent to blunt domestic opposition that Beijing should not get control of national assets.

Sri Lanka will have a majority stake in the firm dealing with security, ensuring that it controls what ships can dock there, while China will run the company in charge of business.

Unease about Chinese presence

In New Delhi, South Asia expert with the Institute of Defense Studies and Analyses, Sukh Deo Muni, said that while some of India’s concerns have been met, the Chinese presence in the port would remain a worry. “The project is dominated by the Chinese which may not be a very pleasant thing for India. To what extent Sri Lanka would be able to monitor them on some of the sensitive areas remains to be seen.”

Since Hambantota port was commissioned, it has…

Article Source…

Leave a Reply

Your email address will not be published. Required fields are marked *