SRI LANKA: Sri Lankan officials hope to lure international businesses with Hambantota port project

Record ID: 560448

  • Title: SRI LANKA: Sri Lankan officials hope to lure international businesses with Hambantota port project
  • Date: 3rd August 2010
  • Summary: HAMBANTOTA, SRI LANKA (AUGUST 01, 2010) (REUTERS) VARIOUS OF CONSTRUCTION WORK ON THE SEA VARIOUS OF BREAKWATER TRUCKS AT CONSTRUCTION SITE HEAVY MACHINERY VARIOUS OF WALL VARIOUS OF TRUCKS CARRYING SOIL VARIOUS OF SPEAKER OF PARLIAMENT CHAMAL RAJAPAKSA INSPECTING CONSTRUCTION WORK (SOUNDBITE) (Sinhala) SPEAKER OF PARLIAMENT CHAMAL RAJAPAKSA SAYING: "Ships that go to the west and the east go close by here. We decided to build a port in Hambantota taking into consideration the future developments in the world." VARIOUS OF HEAVY MACHINERY DRILLING STONES VARIOUS OF CHINESE WORKERS ON SITE VARIOUS OF NEWS CONFERENCE (SOUNDBITE) (Sinhala) DEPUTY MINISTER OF PORTS AND AVIATION ROHITHA ABEYGUNAWARDENE SAYING: "The President clearly said that he wants to make Sri Lanka an international shipping hub. Today this has become a reality." TRUCKS AROUND CONSTRUCTION SITE HEAVY MACHINERY DIGGING SOIL CONSTRUCTION SITE TRUCKS DRIVING AWAY
  • Embargoed: 18th August 2010 13:00
  • Keywords:
  • Location: Sri Lanka
  • Country: Sri Lanka
  • Topics: International Relations,Economic News
  • Reuters ID: LVAA8P1YOFT6UZ21C6ORS0ZEPJ7P
  • Story Text: Sri Lanka invites investors for its $1.5 billion U.S. dollars Hambantota port project, the keystone of a $6 billion post-war infrastructure revitalisation drive.
    A new port on on Sri Lanka's southern coast along an ancient maritime "Silk Road" trading route and one of the world's biggest East-West shipping lanes hopes to attract international business investors.
    During a media preview of the port on Sunday (August 1), officials said the port and its accompanying services represent the single largest investment option for foreign investors in Sri Lanka, which is aiming to transform its economy after finally ending a quarter-century separatist war in May 2009.
    One option that is not on the table for outside investors is the oil bunkering facility. Many have speculated China wants the right to use the site as part of its "string of pearls" strategy to expand its influence and maintain energy security.
    Since the defeat of the Tamil Tigers, China has been aggressively seeking cooperation and investment opportunities in Sri Lanka along with regional rival India.
    China is seeking to use the port for its navy in order to counter India but President Mahinda Rajapakse has yet to give the green light to the controversial plan. A Chinese military presence near southern India will cause New Delhi concern, but analysts say the it will also provide Rajapakse with a card to play against India in future dealings, both economic and strategic.
    Officials say about 30 investors -- including those from India, China, Singapore, Russia, the Middle East, Australia and major shipping lines have expressed interest in the venture.
    China, Sri Lanka's largest infrastructure lender, has loaned $425 million toward the port project, which will be Sri Lanka's largest. The government is negotiating with China for a further $800 million loan for the second phase.
    Government officials declined to say if China will have a role in operating the bunkering facility, about which neighboring India has expressed concern to the Sri Lankan government.
    "Ships that go to the west and the east go close by here. We decided to build a port in Hambantota taking into consideration the future developments in the world, " said the Speaker of Parliament, Chamal Rajapaksa .
    He is the former minister for ports and the elder brother of President Mahinda Rajapaksa.
    Political analysts say Sri Lanka has successfully managed Indian pressure over the Chinese port investment, which could also help trans-shipment trade on the subcontinent.
    Hambantota is one of four ports being built or upgraded under President Mahinda Rajapaksa's plans to renew the Indian Ocean island nation's $42 billion economy by returning it to its old and lucrative role as a trading hub.
    "The President clearly said that he wants to make Sri Lanka an international shipping hub. Today this has become a reality," the Deputy Minister for Ports and Aviation, Rohitha Abeygunawardene said.
    Sri Lanka initially aims to get 2,500 of the 70,000 cargo vessels that pass Hambantota annually to use its bunkering and cargo handling facilities, and expand that to 8,000 a year once the second phase is done in 2014.
    Sri Lanka now handles around 6,000 ships annually in its only port in Colombo on the western coast, which requires ships plying the East-West shipping lanes to divert.
    Initially, Hambantota will have 100,0000 metric tonnes of bunkering capacity, which could be expanded to 4 million metric tonnes if demand picks up.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register