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H’tota Port lease not being renegotiated: Palitha Kohona

23 Mar 2021

  • If talks are underway, the two sides are ‘whispering … so that nobody else hears’

  • Denies claims Sri Lanka is sliding into debt trap, saying China accounts for just 10% of outstanding borrowing

Sri Lanka’s Ambassador to China has dismissed suggestions that Sri Lanka is planning to extend a 99-year lease it granted to Beijing to run the Hambantota Port. Palitha Kohona said in an interview that his country would “never be an unsinkable aircraft carrier posing a threat to anyone else”, referring to China’s ongoing power struggles with the US and India. Hambantota’s location at the southern tip of Sri Lanka, overlooking South Asia’s vital sea lanes, makes it a potential key maritime hub in the Indian Ocean. Colombo agreed to hand over the running of the port in 2017, when it was unable to make the repayments on the Chinese loans used to develop it. “If there is a negotiation, it’s very secretive and nobody would say it to you. They are whispering to each other so that nobody else hears it,” Kohona said. He was responding to a question about reports that Sri Lankan President Gotabaya Rajapaksa was revisiting the deal with China. “No, I think it’s absolutely rubbish,” he said. Sri Lanka’s Foreign Minister Dinesh Gunawardena was quoted by Ceylon Today as saying last month that the original port deal had a provision to extend the term of the lease by a further 99 years, but that it had been a “mistake” made by the previous government. Beijing also denied the deal was being reviewed, with Chinese Foreign Ministry Spokesman Wang Wenbing saying the port’s operations were expanding. Funded and built by Chinese companies, the Hambantota project has been a focus for critics who accuse China of using “debt-trap diplomacy” to boost its geopolitical influence around the world. Sri Lanka has relied heavily on foreign capital for infrastructure development, and there are concerns it will be unable to meet its repayments due to the damage caused to its tourism industry by the coronavirus pandemic. Kohona, however, dismissed suggestions Sri Lanka was falling into a debt trap. “I’m saying very responsibly and without any reservation that Sri Lanka’s debt to China is less than 10% of our entire debt, and we can’t get into a trap. The rest of our debt is owed to multilateral institutions, to Wall Street, and to others,” he said. “In almost every situation, China did not come to Sri Lanka and say, ‘here’s money, take it’. We went to China and asked for the money. “It must be a little senseless for a country to get itself into a debt trap… we’ve carefully judged what we needed. When we asked others, they were not ready to give it. So we went to China.” China had provided financial support to help Sri Lanka “get over this difficult period”, Kohona said. Sri Lanka recently negotiated a $ 500 million loan from China Development Bank and a $ 180 million loan from the Beijing-headquartered Asian Infrastructure Investment Bank. The two countries have also agreed on a $ 1.5 billion currency swap. (South China Morning Post)


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