Sri Lanka, Struggling With Debt, Hands a Major Port to China
12, 2017
NEW DELHI — Struggling to pay its debt to Chinese firms, the nation of Sri Lanka formally handed over the strategic port of Hambantota to China on a 99-year lease last week, in a deal
that government critics have said threatens the country’s sovereignty.
In July, the state-controlled China Merchants Port Holdings Company signed a deal with the Sri Lanka Ports Authority
to control a 70 percent stake in the Hambantota port, which lies on the southern coast of the country.
Sri Lanka said that The price being paid for reducing the China debt could prove more costly than the debt burden Sri Lanka seeks to reduce,
On Saturday, the government completed the handover of the port to two state-controlled entities run through China
Merchants Port Holdings, which has already made its first payment of $300 million to the Sri Lankan government.
After the original port deal was signed in July, Namal Rajapaksa, a member of Parliament
and son of the former president, asked on Twitter whether the government was "playing geopolitics with national assets." Perceiving a threat to its regional hegemony, India has also watched with suspicion as cranes operated by Chinese firms began to dot the skyline in Colombo, Sri Lanka’s capital.
As Western nations accused Mahinda Rajapaksa, the country’s former president, of grievous human rights abuses during the final stages of Sri
Lanka’s nearly 26-year civil war, China extended billions of dollars of loans to Mr. Rajapaksa’s government for new infrastructure projects.