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China signed a deal to lease the Hambantota port, located at the southern tip of Sri Lanka, in 2017. Photo: Xinhua

China can extend Hambantota port lease to 198 years, Sri Lankan minister says

  • Beijing denies the deal is being renegotiated after reports that Colombo is revisiting the agreement
  • Foreign Minister Dinesh Gunawardena said the previous government had agreed to a 99-year lease with the option of another 99 years
Sri Lanka’s foreign minister said the 99-year lease of the Hambantota port to China could be extended to 198 years, calling it a “mistake” made by the previous government, after reports that Colombo was revisiting the agreement.
The port deal – signed in 2017 by the previous Sri Lankan government to cover its debts to China – has been the subject of intense international scrutiny amid accusations Beijing is using “debt trap diplomacy” for geopolitical clout.

Hambantota’s location at the southern tip of Sri Lanka, overlooking South Asia’s vital sea lanes, makes it a potential key maritime hub in the Indian Ocean.

Sri Lankan President Gotabaya Rajapaksa, younger brother of two-time former president Mahinda Rajapaksa, said he wanted to renegotiate the deal with China soon after he took office in late 2019, but later denied he had such a plan.

Sri Lankan President Gotabaya Rajapaksa is said to be revisiting the port deal with China. Photo: Xinhua

However, on February 6 the chairman of the Sri Lanka Ports Authority told Ceylon Today that the president was revisiting the port deal. General Daya Ratnayake also said Sri Lanka had not gained much from the agreement and that it had relocated its naval base from the area controlled by China “after many discussions with the Chinese officials”.

“We are revisiting the proposal even now,” Ratnayake was quoted as saying. “It was unfortunate and such a deal on Hambantota port shouldn’t have been done. But the review process is going on.”

Sri Lanka revives Colombo port deal with Japan, India over ‘geopolitical concerns’

Foreign Minister Dinesh Gunawardena added to uncertainty over the deal on Saturday, telling the same newspaper that “the previous government made a mistake on the Hambantota port deal when they cancelled the lease and gave it on a longer period of 99 years plus another 99 years once the first term ends”.

But he did not say whether the government intended to make changes to the agreement.

Beijing said the deal was not being renegotiated, and that the port had overcome the challenges of the pandemic and its operations were expanding. Photo: AFP

China on Wednesday denied the deal was being renegotiated, with foreign ministry spokesman Wang Wenbin instead saying that the port’s operations were expanding.

“The relevant reports are inconsistent with facts,” Wang said at a regular press briefing in Beijing.

He said the deal was negotiated under an “equal and voluntary basis” between the two countries, and that it was intended to transform the port into a logistics, transport and industrial hub in the Indian Ocean.

“With mutual efforts from the Chinese and Sri Lankan sides, the Hambantota port has overcome the challenges of the pandemic and has maintained good momentum in expanding operations,” he said.

The port deal, a key project in China’s controversial Belt and Road Initiative, has been closely watched, with critics saying it could add to Sri Lanka’s heavy debt burden, which could push Colombo to accept Beijing’s geopolitical demands.

Pang Zhongying, an international relations scholar with the Ocean University of China, said Beijing was likely to face more pressure over its activities in Sri Lanka given its growing rivalry with the United States and also India in the region.

“Sri Lanka has long been in India’s backyard and it has a complicated relationship with India. And as the [Joe] Biden administration pushes to deepen [America’s] Indo-Pacific strategy, China is likely to face even more challenges in the region,” he said.