China and Sri Lanka agrees to expedite the implementation of major economic projects

COLOMBO (News 1st) - The Xinhua News agency reported that China and Sri Lanka have agreed to speed up the implementation of cooperation on major economic projects. According to reports this includes the Colombo Port City and the Hambantota Port and will be done under the existing consensus, and on that basis draw up and promote a new blueprint for future cooperation. Days after President Gotabaya Rajapaksa called the Hambantota Port lease agreement between the previous government and China, a ‘mistake’ and called for it to be re-negotiated, China responded saying the cooperation between both countries, including in the project of Hambantota Port, was based on ‘equal-footed consultation and a win-win spirit’. It was termed as a white-elephant by the former government and in 2017 the Sri Lanka Ports Authority entered into a partnership with China Merchants Port Holdings to develop and manage the port which was leased to the latter for 99 years. Ajith Nivard Cabraal speaking to a website said Sri Lanka wants the port back adding Sri Lanka would pay back the loan in due course in the way originally agreed without any disturbance. Sri Lanka’s relationship with China may resemble the one new governments in Pakistan and Malaysia last year adopted as they sought to revisit and renegotiate investment agreements clinched by their predecessors with China. The matter on the Hambantota Port placed a serious issue on the state coffers because the deal in 2017 gave the Sri Lankan government $1.4 billion, which was widely regarded as to be used to pay off the debt to China. Speaking to News 1st, Governor of the Central of Bank of Sri Lanka Dr Indrajith Coomaraswamy said there was no debt-to-equity swap, and money which came into the treasury was used for debt servicing including International Sovereign Bonds. To manage the operations of the port, Sri Lanka and China agreed to form the Hambantota International Port Group. When News 1st contacted a source from HIPG, they say they cannot comment on the matter.