Sri Lanka is not renegotiating Hambantota port lease deal with China, ambassador says

Sri Lanka’s ambassador to China has dismissed suggestions the South Asian country is planning to extend a 99-year lease it granted to Beijing to run Hambantota port, according to a report filed by South China Morning Post.

Palitha Kohona said in an interview that his country would “never be an unsinkable aircraft carrier posing a threat to anyone else”, referring to China’s ongoing power struggles with the United States and India.

Hambantota’s location at the southern tip of Sri Lanka, overlooking South Asia’s vital sea lanes, makes it a potential key maritime hub in the Indian Ocean. Colombo agreed to hand over the running of the port in 2017 when it was unable to make the repayments on the Chinese loans used to develop it.

“If there is a negotiation, it’s very secretive and nobody would say it to you. They are whispering to each other so that nobody else hears it,” Kohona said.

He was responding to a question about reports that Sri Lankan President Gotabaya Rajapaksa was revisiting the deal with China.

“No, I think it’s absolutely rubbish,” he said.

Beijing also denied the deal was being reviewed, with Chinese foreign ministry spokesman Wang Wenbing saying the port’s operations were expanding.
Funded and built by Chinese companies, the Hambantota project has been a focus for critics who accuse China of using “debt-trap diplomacy” to boost its geopolitical influence around the world.

Sri Lanka has relied heavily on foreign capital for infrastructure development and there are concerns it will be unable to meet its repayments due to the damage caused to its tourism industry by the coronavirus pandemic.

Kohona, however, dismissed suggestions Sri Lanka was falling into a debt trap.

“I’m saying very responsibly and without any reservation that Sri Lanka’s debt to China is less than 10 per cent of our entire debt and we can’t get into a trap. The rest of our debt is owed to multilateral institutions, to Wall Street and to others,” he said.

“In almost every situation, China did not come to Sri Lanka and say, here’s money, take it. We went to China and asked for the money.

“It must be a little senseless for a country to get itself into a debt trap … we’ve carefully judged what we needed. When we asked others, they were not ready to give it. So we went to China.”

China had provided financial support to help Sri Lanka “get over this difficult period”, Kohona said.

(South China Morning Post)