Dec 26, 2017

Sri Lanka has formally handed over Hambantota Port to China for 99 – Year Lease.


Finally Sri Lanka has formally handed over Hambantota Port to China under Lease for 99 Years.
The most important strategically located right at Southern part of Sri Lanka in Indian Ocean, which is connecting Middle East and East Asia. It had gained strategic significance after Sri Lankan Government has decided to build massive deep-sea port and Airport with huge Chinese Loans which they could never pay back due to low traffic of Business flow at Designated Port.
China has formally received the possession of Sri Lankan southern strategic Port of Hambantota on 99-year lease. The Sea-Port and the Investment zone around it will be owned by Two Chinese firms managed by China Merchants Port Holdings Company (CMPort) and Sri Lanka Ports Authority. 

Gist:
The Port started functioning in the Year 2011, the Project couldn’t earn the desired Business and suffered heavy losses making it impossible for Sri Lankan Government repay its debts to China. In July 2017  the Sri Lankan Government had signed $ 1.10 Billion deal with China to sell 70% stake in Hambantota Port to China under lease agreement for 99 Years. So far Sri Lanka has received $ 300 Million as an initial payment. Local residents of Hambantota are protesting selling of National assets to Foreign entities affecting National integrity and sovereignty and leading to Violent Clashes. This has  raised concerns specifically for U.S and India on China taking over control of Sri Lankan Port.

Importance of Port:
For China, Hambantota port is strategically important for its One Belt One Road project, which aims at building new Road of trade routes between China and more than 60 countries in Middle East, Africa, Asia, and Europe. The project is strengthened by network of harbours across the world that has put China in position to challenge US as the world’s most important maritime Superpower. Similarly further the chain development of OBOR which is CPEC (China Pakistan Economic Corridor) costing $ 55 Billion again a matter of big concern for India which is crossing areas of Pakistan occupied Kashmir.

India’s Concern over Hambantota Deal:
India is worried about the Port which is part of Chinese strategy with an objective to surround India and dock its military vessels in Indian Ocean. Recently U.S. has reinitiated its Quadrilateral Grouping between U.S. India Japan and Australia to counter expansionist China.  

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