By Sandun Jayasekera
There will be a marked improvement in the country’s macroeconomic fundamentals, following the payment of US$ 584 million (approximately Rs.94 billion), the last tranche for the Hambantota Port Development Project by China’s CMPort, Ports and Shipping Minister Mahinda Samarasinghe said.
“As a result of this payment, there will be a considerable increase in foreign reserves whereby it would directly reflect on the rupee and arrest its depreciation. Sri Lanka would be in a better position in debt servicing, credit rating and to improve confidence among investors and attract more FDI,” he stressed.
This becomes the single highest ever foreign direct investment received by Sri Lanka to-date.
The tranche amounted to US $ 584.2 million follows the first and second tranches released in December last year and January this year, which amounted to US $ 292 million and US $ 97 million, respectively.
With this payment, CM Port fulfils the US $ 976 million investment value, one of the port concessions and in terms of the concession agreement, CM Port has agreed to deposit a further sum of US $ 146 million, being investment value two, to be utilized for port and marine-related activities.
In view of the urgent need for viable and efficient operation of the Hambantota port, the SLPA and Government of Sri Lanka entered into the concession agreement with CM Port in July last year, for the management, operation and development of the Hambantota port on a public-private partnership model.
On December 9 last year, two Sri Lankan companies established under the concession agreement namely, Hambantota International Port Group (HIPG) and Hambantota International Port Services Co. (Pvt.) Ltd (HIPS) officially took over the Hambantota port, thereby making the concluded concession agreement effective.
“CM Port is one of the most successful global companies in the ports sector and its investment in the Port of Hambantota can be described as a credible vote of confidence in its potential as well as in the economy of Sri Lanka,” SLPA Chairman Parakrama Dissanayake stressed.
The two companies set up in Hambantota plans to invest an additional US $ 400-600 million on phase I and II of the Hambantota port, an SLPA statement said.