Sri Lanka leases Hambantota port to Chinese to cover loans – from China

Sri Lanka has formally handed over its loss-making southern port of Hambantota to China on a 99-year lease in order to pay off the $1.3bn it borrowed from Chinese state-controlled entities to build it in the first place. Under the terms of the deal, the state-run China Merchants Port Holdings will take a 99-year lease on the port and about 15,000 acres nearby for an industrial zone.
The agreement triggered a storm of protest amid concerns over growing Chinese influence in the region and plans to evict thousands of villagers in the new zone. A coffin was carried through the streets before cardboard cutouts of Sri Lanka’s President Maithripala Sirisena and Prime Minister Ranil Wickremasinghe  that were then set alight.
The government has now given assurances that the villagers will be given new land and that China will only run commercial operations from the port. Hambantota is  now set to become a key link in the China-Indian Ocean-Africa-Mediterranean Sea blue economic passage,  part of President Xi’s trillion-dollar Belt and Road  initiative to resuscitate  the historic Silk Road trade routes between Asia and Europe. The passage, plans for which were unveiled  this June, will run westward via the South China Sea to the Indian Ocean, where it will link up with economic corridors criss-crossing South and South East Asia.
The Prime Minister welcomed the deal at an official handing over ceremony at the weekend.  “With this agreement we have started to pay back the loans.and Hambantota will be converted to a major port in the Indian Ocean,” he said. “There will be an economic zone and industrialisation in the area which will lead to economic development and promote tourism.” Some of the country’s press, including the Daily Mirror that carried this cartoon, remain to be convinced.

Source: FT