Sri Lanka is selling an 80 percent stake in a deep-water port on its southern coast, close to one of the world’s busiest sea lanes, to a Chinese state-owned company, The Wall Street Journal reports, citing senior officials.
Under the agreement, a copy of which was reviewed by the Journal, China Merchants Port Holdings Co. Ltd. (00144.HK) will pay about US$1.1 billion for its share of the port and adjoining land in Hambantota district.
Sri Lanka’s ports authority will retain the remaining 20 percent.
Officials expect the deal to be completed by early January.
The port, in Hambantota, lies along an important trade route linking the Middle East and Asia, the newspaper said.
China’s navy has been stepping up its operations in the Indian Ocean as it seeks to project power westward, the report added.
“We will watch carefully,” a senior US official said. “These things do have long-term implications.”
But Sri Lanka’s development minister, Malik Samarawickrama, sought to downplay strategic concerns, saying “there is no issue” as it is a commercial deal.
Beijing has said its projects in Sri Lanka and elsewhere in the region are aimed at boosting trade and fostering economic development.
– Contact us at [email protected]