SL negotiating with Chinese Government to offset low rates on H’tota Port City loan
The Sri Lankan Government has invited the Chinese Government to develop the next phase of the Hambantota Port in an effort to set off some of the loans obtained from China, Minister of Ports and Shipping Industry Arjuna Ranatunga said. “We have sent a proposal to them in this regard and the Chinese Government is to get back within two to three weeks,” Mr. Ranatunga told the Business Times. He said that Minister of Development Strategies and International Trade, Malik Samarawickrama is in discussion with the Chinese counterparts pertaining to this proposal which has spelt out reducing and offsetting the US$1.2 billion loan that was obtained from the Chinese for the initiation of the Hambantota Port project during the last regime.
“The Chinese have requested us to give them the next phase of the Hambantota Port project. Minister Samarawickrama is discussing with the Exim Bank of China on reducing the interest rates of the earlier loan and related affairs. We’re awaiting their reply,” he added. This has come on the back of the Chinese Government showing interest in the next phase of Hambantota Port’s development. In recent media reports, Prime Minister Ranil Wickremesinghe has said that the government wants to finalise the Hambantota dockyard project with the China Harbour Engineering Company before September this year. China had requested for a 1000 acre land to set up an investment zone, Mr. Wickremesinghe has said.
Meanwhile, a US company has expressed interest to set up a $2,500 million crude oil refinery at Hambantota Port in a 470 acre land. Officials said that a Chinese firm has also expressed interest in a similar project at the Hambantota Port. In March this year Mr. Samarawickrama and Minister of Law and Order Sagala Ratnayake went to China as a prelude to Mr. Wickremesinghe’s visit to China later that month. The two ministers had explored ways and means of mobilizing Exim Bank and China Development Bank investment for new projects, as well as strengthening cash flow and liability management of ongoing projects.