Sri Lanka will lease out the loss-ridden southern port of Hambantota to a Chinese firm next month raising USD 1.12 billion to help pay off mounting debts, the government said today.
"We hope to finalise the deal by early January to raise about 1.12 billion dollars," Ports Minister Arjuna Ranatunga said.
Sri Lanka owes China around USD 8 billion for supporting mega infrastructure development projects under former president Mahinda Rajapaksa's government.
The seaport in Hambantota and its airport have been making huge losses. The government of President Maithripala Sirisena has been renegotiating with China to service the debts it owes the Chinese government.
Accordingly the government has decided to give China on long lease an 80 per cent stake of the Hambantota port.
Talks with China Merchants Port Holdings have been successful, the government said.
Ranatunga said the Chinese firm had wanted the port on a 199-year lease which has been brought down to a 99-year lease in the agreement to be signed in January.
The port is currently embroiled in an employee dispute with temporary workers demanding they be made permanent before the port could be handed over to the Chinese firm.
Over 480 workers have been on a work stoppage for the last 8 days. The navy was deployed to free a vessel held by the port workers.
The residents of Hambantota today staged another protest against the government to give China 15,000 acres to build an industrial centre.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)