Sri Lanka formally handed over commercial activities in its main southern port to a Chinese company on Saturday and received US$292 million out of a US$1.12 billion deal, Finance Minister Mangala Samaraweera said. The deal, signed in July, will see China Merchants Port Holdings, handling the Chinese-built Hambantota port on a 99-year lease. The port is near the main shipping route from Asia to Europe and likely to play a major role in China’s “Belt and Road Initiative”. Can China’s Belt and Road plan bring Chinese-style prosperity to developing nations? “Today we received US$292 million as the first tranche of the Hambantota Port joint venture. This is but the first step in realising the true commercial value of the port after seven long years,” Samaraweera said. The US$1.5 billion port opened in 2010, but was incurring losses due to lack of commercial activity. Ports Minister Mahinda Samarasinghe said the government would receive a further 10 per cent, or about US$100 million, in a month and another US$585 million in six months. Top Chinese contractor steps up pace of work on massive projects in Malaysia and Sri Lanka An initial plan to give the Chinese firm an 80 per cent stake triggered protests by trade unions and opposition groups, forcing ministers to make some revisions that limit China’s role to running commercial operations while the government retains oversight of broader security issues. Both sides then agreed to redraw the deal and the Chinese firm will now hold a 70 per cent stake in a joint venture with the state-run Sri Lanka Ports Authority, part of a plan to convert US$6 billion of loans that Sri Lanka owes China into equity. Sri Lanka’s president sacks outspoken justice minister who criticised US$1.1 billion port deal with China Sri Lanka said the Chinese firm would invest an additional US$600 million to make Hambantota port operational and US$1.12 billion from the deal would be used for debt repayment. Government and diplomatic sources told Reuters that the United States, India and Japan had also raised concerns that China might use the port as a naval base. India is in advanced talks with Sri Lanka to operate an airport near Hambantota port.