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Sri Lanka signs deal on Hambantota port with China

Sri Lanka has signed a $1.1bn (£837m) deal with China for the control and development of the southern deep-sea port of Hambantota.

The deal had been delayed by several months over concerns that the port could be used by the Chinese military.

The government has given assurances that China will run only commercial operations from the port, on the main shipping route between Asia and Europe.

Sri Lanka's government says money from the deal will help repay foreign loans.

Under the proposal, a state-run Chinese company will have a 99-year lease on the port and about 15,000 acres nearby for an industrial zone.

The plan envisages the eviction of thousands of villagers but the government says they will be given new land.

China has pumped millions of dollars into Sri Lanka's infrastructure since the end of a 26-year civil war in 2009.

Protests against the agreement, which were organised by the Port Workers Union, took place on the streets of the capital, Colombo, on Saturday.

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Hambantota port, overlooking the Indian Ocean, is expected to play a key role in China's "One Belt, One Road" initiative, otherwise known as the new Silk Road, which will link ports and roads between China and Europe.

 

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The initiative is being keenly watched by regional trade rivals including India and Japan.

Opponents of the project said they feared the area being turned into a Chinese colony. There were also concerns that the Chinese navy could use the port as a base.

"We are against this because it undermines our sovereignty," opposition MP Namal Rajapaksa of the United People's Freedom Alliance (UPFA) told the BBC.

 

Mr Rajapaksa, who is the eldest son of former Sri Lankan President Mahinda Rajapaksa, said that India would also "be very uncomfortable with this arrangement".

"We have always considered Hambantota port as one of the biggest opportunities for our economy, given its strategic location," he said, adding: "The government is just giving it away."

Hambantota port, overlooking the Indian Ocean, is expected to play a key role in China's "One Belt, One Road" initiative, otherwise known as the new Silk Road, which will link ports and roads between China and Europe.

 

Courtesy The Econoimst

July 29, 2017

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