China Harbour Engineering to invest $1 billion in Sri Lanka’s Port City: minister

Sand is dredged from the sea at Colombo Port City construction site during the Sri Lanka’s Prime Minister Ranil Wickremesinghe’s (not pictured) visit in Colombo, Sri Lanka January 2, 2018. REUTERS/Dinuka Liyanawatte

Shihar Aneez January 3, 2018

COLOMBO (Reuters) – A consortium led by state-run China Harbour Engineering Company Ltd will invest $1 billion to build three 60-storey office towers on reclaimed land of the Port City development in Sri Lanka’s capital, a government minister said on Tuesday.

The $1.4 billion development of Port City, a project of China Communication Construction Company (CCCC) (601800.SS), the parent company of CHEC, began in late 2016 as part of Beijing’s ambitious plans to create a modern-day “Silk Road” across Asia.

“It will be part of the new financial city,” regional development minister Champika Ranawaka told reporters while accompanying Prime Minister Ranil Wickremesinghe on a inspection tour of the Port City development in Colombo.

“The investment will be $1 billion and we expect to sign the agreements this month in Beijing.”

CHEC officials were not immediately available for comment.

Sri Lanka is preparing legislation with tax incentives to lure investment to the 269-hectare (665-acre) Port City tract.

China Communications Construction Co Ltd13.17
601800.SS Shanghai Stock Exchange +0.37(+2.89%)


About 60 percent of its total area is reclaimed land from the sea in the commercial heart of Colombo, adjacent to the main port and the historic Galle Face Green park. The rest is expected to be reclaimed by June 2019.

For the overall project, Sri Lanka anticipates an eventual $13 billion of investment in housing, marinas, health facilities, schools and other developments over the next 30 years. The project is expected to create over 83,000 jobs.

CHEC Port City Colombo (Pvt) Ltd, the Sri Lanka company handling the project for CCCC, aims to deliver the first site for construction by the end of 2018.

Reporting by Shihar Aneez; editing by Mark Heinrich

Source: Reuters “China Harbour Engineering to invest $1 billion in Sri Lanka’s Port City: minister”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Lies, Fake News Cannot Stop China’s Belt and Road Win-win Cooperation

In SubChina’s report titled “Debt-trap: Debt-trap diplomacy on the Belt and Road?” today, it quotes Indian author and commentator Brahma Chellaney’s tweet, “Debt-Trap Diplomacy: In a reminder of how Chinese loans are collateralized by strategically important physical assets, Sri Lanka today formally handed over the Hambantota port to China on a 99-year lease because it is simply not in a position to repay its onerous debt to Beijing.”

That is pure lie but SubChina regards it as worthwhile basis for its fake news to describe China’s Belt and Road diplomacy as debt trap.

There is no Belt and Road debt in the port project at all.

The Chinese investor China Merchant Port Holdings (SM Port) is a subsidiary of China Merchant Group listed on Hong Kong stock exchange with obligation to disclose its Hambantota Port transaction.

According to the Group’s public announcement titled “Potential Discloseable Transaction Concession Agreement in Relation to Hambantota Port, Sri Lanka”, the company is to pay SLPA (Sri Lanka Port Authority) USD973.658 millions for the acquisition of 85% of issued share capital of HIPG (Hambantota International Port Group) and 58% of issued share capital of HIPG (Hambantota International Port Services) at USD146.00 million. says in its report “Hambantota port handed over to HIPG and HIPS” on December 9, 2017, “The National Treasury (of Sri Lanka) received 294 million dollars as the initial 30% of the total amount that will be received.”

With such huge amount of payments, the Chinese company has only obtained shares in Sri Lanka-Chinese joint ventures in charge of the port. The port assets belong to the joint ventures instead of China.

Sri Lanka is heavily in debt when it concluded the above port agreement, but most of its USD25.3 billion debts in 2016 were borrowed by its former president Mahinda Rajapaksa for infrastructure projects mainly consisting of Colombo Lotus Tower, Magampura Mahinda Rajapaksa Port, Colombo Harbour South Container Terminal, Mattala Rajapaksa International Airport, Colombo – Katunayake Expressway, Mahinda Rajapaksa International Cricket Stadium. None of those projects are related to China’s 21st Century maritime Silk Road that began in September 2013, not long before the end of President Rajapaksa’s tenure on January 9, 2015 though 34% of Sri Lanka’s debts was borrowed from China.

As a matter of fact, instead of borrowing any loans from China, Sri Lanka receives USD964 million from China’s Belt and Road project to enable it to repay its debts borrowed for its expenditures not related to Belt and Road.

The above facts prove that SubChina’s description of Chins’s Belt and Road as debt-trap is pure lie and fake news.

True, China will stretch its influence to developing countries in Asia, eastern Europe and Africa through its Belt and Road initiative, but it has to be win-win cooperation to benefit those countries instead traps to harm their interests like colonialists did in the past. China is certainly not so stupid as to copy colonialists’ failures.

Sri Lanka will certainly be benefited from Hambantola Port developed by China. For now, the port will be second in importance to Singapore for trade through Indian Ocean, but if Thai political situation has stabilized, a canal across Kra Isthmus will certainly be built as the benefit of the shortcut for China, Japan and South Korea’s trade through Indian Ocean is too attractive to ignore. Then Hambantola will replace Singapore as the major shipping hub for the trade.

The benefits of the win-win cooperation in China’s Belt and Road initiative is too great for India and SubChina and other media to deny by lies and fake news.

Comment by Chan Kai Yee on SubChina’s report, full text of which can be viewed at

Sri Lanka Has Transferred Hambantota Port Operation to China

According to CCTV primetime news report “Sri Lanka transfers rights of operation of Hambantota Port to China” yesterday, Sri Lanka government transferred the rights of commercial and administrative management of operation to China in a ceremony yesterday. The above three photos are taken from the footage of CCTV report. The first is Sri Lanka Prime Minister Ranil Wickremesinghe speaking at the ceremony, the second, the handover of the token of the rights and the third, a map that shows the strategic location of the port, which is a key area of China’s Belt and Road initiative.

Source: CCTV “Sri Lanka transfers rights of operation of Hambantota Port to China” (summary by Chan Kai Yee based on the report in Chinese)

Sri Lanka parliament backs tax exemptions for port deal with Chinese

Shihar Aneez, Ranga Sirilal December 9, 2017

COLOMBO (Reuters) – Sri Lanka’s parliament approved on Friday a raft of tax concessions for a Chinese-led joint venture which will handle the southern port of Hambantota under a $1.1 billion deal that has sparked public anger and concerns in India and elsewhere.

The deal, signed in July, leases the port to a Chinese firm for 99 years and the tax concessions include an income tax holiday of up to 32 years. The port is near the main shipping route from Asia to Europe and likely to play a key role in China’s “Belt and Road” initiative.

The joint venture comprises the China Merchants Port Holdings, which holds a 70 percent stake, and the Sri Lanka Ports Authority (SLPA), which has the remaining 30 percent.

“Today the parliament approved two motions… to grant certain tax incentives to those two companies operating the Hambantota port,” Ports Minister Mahinda Samarasinghe told Reuters.

In the 225-member parliament 72 lawmakers backed the tax concessions and seven voted against. Many opposition deputies boycotted the vote.

The government pressed ahead with the vote despite a suggestion from opposition lawmaker Dinesh Gunawardena, who suggested the measures should require a two-thirds majority, or more than 150 votes, given the strategic nature of the issue.

Government and diplomatic sources have told Reuters that the United States, India and Japan had raised concerns that China might use the port as a naval base and could be a threat to security and stability in the Indian Ocean.

An initial plan to give the Chinese firm an 80 percent stake triggered protests by trade unions and opposition groups, forcing the government to make some revisions that limit China’s role to running commercial operations while retaining for Colombo oversight for broader security issues.

The government will hand over the port, built with Chinese loans at a cost of $1.5 billion, to the joint venture on Saturday and will receive $300 million, or around 30 percent of the deal, Samarasinghe said.

He also said the SLPA and the Chinese firm had signed the lease agreement just before parliament’s approval of the tax exemptions.

There has also been widespread public anger over plans for a 99-year lease of 15,000 acres (23 sq miles) to develop an industrial zone next to the port. This land lease is under negotiation.

The parliamentary vote came a day after Sri Lanka’s Supreme Court set a date for Jan. 11 to rule on three petitions against the leasing of land around the port to China.

Sri Lanka has said the Chinese firm will invest an additional $600 million to make Hambantota port operational and $1.12 billion from the deal will be used for debt repayment.

India is in advanced talks with Sri Lanka to operate an airport near Hambantota port.

Reporting by Shihar Aneez and Ranga Sirilal; Editing by Gareth Jones

Source: Reuters “Sri Lanka parliament backs tax exemptions for port deal with Chinese”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

China’s Maritime Silk Road Taken Shape in Indian Ocean

Abdulla Yameen Abdul Gayoom (left) shakes hands with Xi Jinping after signing deals at the Great Hall of the People in Beijing on Thursday. Photo: Reuters

China has already the rights over ports in Pakistan and Sri Lanka.

SCMP says in its report “China and Maldives sign free trade, maritime deals” yesterday that during Maldivian President Abdulla Yameen Abdul Gayoom’s China visit he signed deals to cooperate on a free-trade agreement and on Beijing’s maritime trade plan.

With close ties with Maldives and Pakistan and port in Sri Lanka, China’s 21st century maritime Silk Road has taken shape in Indian Ocean.

The report says that the deals are expected to aggravate India’s concerns over China’s influence in South Asia.

True, India may use all its financial resources to import US advanced weapons for its hegemony in Indian Ocean, but Silk Road is a road for peaceful trade that will benefit India in its trade with China, Japan, South Korea and Southeast Asia, especially with Iran for energy.

India cannot be benefited by military approaches. If it cuts China’s trade route through Indian Ocean, its trade route to the Middle East especially Iran will be cut by the iron brothers of Pakistan and China while its trade routes to Southeast Asia, Japan and South Korea will be cut by China.

Comment by Chan Kai Yee on SCMP’s report, full text of which can be found at

China, ISIS threats get India, US together in Sri Lanka and Maldives

Indrani Bagchi Updated: Nov 6, 2017, 09:34 IST

NEW DELHI: China’s aggressive play in the Indian Ocean region has prompted US and India to coordinate closely in Sri Lanka and Maldives — two countries strategically vital for India. This is a far cry from the years when India worked hard to keep the US out of South Asia, now US and India are working together to counter expanding Chinese influence.

Maldives is a matter of particular concern. China has consolidated its hold on the island, building infrastructure with its standard predatory pricing methods. Unlike in Sri Lanka where the Sirisena government is trying to fix its books, president Yameen in Maldives seems perfectly comfortable with growing amounts of debt to China. China’s infrastructure push is natural given that China is possibly a world leader in land reclamation — its the add-ons that are of concern to India+ . China’s financing mechanisms mean that China could be controlling large areas of Maldives fairly soon. There is a real concern about China’s presence in iHavan project on Maldives’ northernmost atoll, sitting in the middle of the busiest transit point between the Middle East and Southeast Asia — and very close to Lakshadweep islands.

Chinese submarines want to use the only viable channel in that region for their forays into south-central Indian Ocean — allowing them control over this channel would be against Indian interests, said sources.

In August, Yameen disregarded India’s request to deny permission to three Chinese warships — as retaliation, India invited Mohamed Nasheed to Delhi, his first visit here since his exile. Yameen is playing his version of hard ball — Maldives repaid GMR’s dues earlier this year, and India suspects China put up the amount, although when it comes to SOS on drinking water, Yameen dials New Delhi.

India and US are also teaming up to monitor returning ISIS fighters into Maldives — this country of 3,50,000 has sent almost 400 ISIS fighters to Syria and Iraq (as comparison, Sweden with 10 million people is contending with 300 returnees). Given restrictive conditions and remote atolls, these radicalised 18-30 year-olds could spell disaster. “There has been an explosion of extremist preachers in Maldives,” remarked a diplomat.

From a time when India persuaded the US to not bid for a monitoring station in Maldives for maritime surveillance for fear of attracting China, India and US have come a long way, largely because China has barrelled its way here, seriously impacting security concerns.

In Sri Lanka, Hambantota and Chinese presence there has spurred Washington’s interest — so its not for nothing that the US aircraft carrier Nimitz visited Sri Lanka last week, without a murmur from India. Sources said, “Indian and US warships keep the oceans free.”

India and US are trying to wean Sri Lanka away from the debt trap created by the Chinese — here Japan has played a big role as well, enjoying a huge cache of goodwill in the island. A diplomat familiar with developments said, “we have great complementarity and coordination between New Delhi, Washington, Tokyo and Colombo.”

India’s more robust presence in countries like Sri Lanka would have normally spooked the local population. But the US and Japan in the game makes it easier for these countries as well. This was alluded to by foreign secretary S. Jaishankar at a think tank last week.

The aim, said, sources here, is to transform Sri Lanka from a “consumer of net security to a contributor to net security in the Indian Ocean region.” In fact, Sri Lanka is being prodded to use its influence with the Buddhist leadership in Myanmar on the Rohingya crisis.

India’s policies in the Indian Ocean region are undergoing a sea change.

Source: The Times of India “China, ISIS threats get India, US together in Sri Lanka and Maldives”

Note: This is The Times of India’s report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Will India Be Encircled by China, Pakistan and Sri Lanka?

I have mentioned in my previous posts India’s concerns that it is sandwiched by China and Pakistan. Now India will be more concerned that it will be encircled by China as Sri Lanka’s foreign minister Tilak Marapana described China as a close friend and ally yesterday according to Reuters’ report “Sri Lanka says keen for early conclusion of China trade deal” the same day.

Marapana wants to set up Sri Lanka-China free trade area soon to boost trade between the two countries.

The report says that in July Sri Lanka signed a $1.1 billion deal to lease its southern Hambantota port to China. That is a major project of China’s Belt and Road initiative. It will give China control of the strategic port close to the main shipping route from Asia to Europe.

There are concerns that the port may be used by Chinese navy. If so, India is not only sandwiched but even encircled by China, Pakistan and Sri Lanka.

For decades since China’s reform and opening up, China has made great efforts to court India’s friendship for win-win cooperation. That is why it has always tried hard to prevent its border dispute with India from growing into military conflict. Therefore the China-Pakistan Economic Corridor will be built but for China’s secure connection to the Middle East and Europe. China develops and controls Sri Lanka’s Hambantota port simply to facilitate its shipping and travel through the Indian Ocean. The two projects have nothing to do with India.

However, those Belt and Road projects will make India’s poor and weak neighbors rich and strong. China wants its neighbors to grow rich and strong, but India perhaps wants the contrary. That is why it is unhappy when its neighbors join China’s Belt and Road initiative in order to grow rich and strong and concerned that it will be encircled when its neighbors have grown rich and strong.

I believe China’s Belt and Road initiative aims at the establishment of an Asian Union like the EU. However India regards it as a scheme to encircle it due to its enmity against China. If it joins the US in containing China, it will lose the golden opportunity of benefiting from the Asian Union in the future.

However, Indian leader Modi does not seem stupid. He has had India join the Shanghai Cooperation Organization (SCO) to be benefited from the cooperation in the organization.

India is lucky as China, Russia and the US all want to win it over. The former two have succeeded in having India joint SCO. Now, it is America’s turn to build relationship with India for the next century aimed at containing China according to US Secretary of State Rex Tillerson’s speech at Center for Strategic and International Studies on October 18.

If India joins China’s Belt and Road efforts, it will certainly be benefited by win-win cooperation with China and other Asian countries. If the Belt and Road initiative enables the establishment of the Asian Union, it will enjoy the benefit of its membership just as EU members enjoying their membership in the EU.

If it joins the US in containing China, it may become China’s enemy and really be encircled by China and its close allies. The US will not suffer as according to Tillerson, the US wants good relations with China. That will make India the only bad guy hated by those who will be benefited by China’s Belt and Road initiative.

Comment by Chan Kai Yee on Reuters’ report, full text of which can be viewed at