Sri Lanka’s cabinet revealed Wednesday that Ports Minister sought cabinet approval to amend the current concession agreement of the Hambantota Port.
Co-Cabinet Spokesman Gayantha Karunathilaka said Ports Minister Mahinda Samarasinghe sought their approval to amend the current concession agreement and to sign an additional agreement.
According to the cabinet proposal, Sri Lankan government has asked China Merchants Port Holdings (CM Port) to bring the date of paying the agreed investment value forward.
Upon completion of previous conditions, as per clause 4.2 of the current concession agreement, CM Port or its affiliates should pay their investment value to the government of Sri Lanka.
As per the current agreement, after deducting the security deposit, 10 percent of the investment value should be paid within a period of one month from the effective date of the agreement.
However, the government has asked CM Port to increase this amount to 30 percent (1st Installment) and pay the amount at the effective date of the agreement.
The government has also asked to pay 10 percent (2nd Installment) of the investment value within a month from the date of implementation of the contract.
As per the current agreement, 30 percent of the value should be paid within 3 months from the date of execution of the agreement.
The remaining 60 percent (3rd Installment) of the investment value should be paid within 6 months of the effective date of the Agreement, same as the current agreement.
A deposit of 5 million US dollars has already been deposited in a special account and the amount is to be transferred to the Ports Authority at the date, the agreement come into operation.
Cabinet has approved this proposal to amend the relevant clauses of the concession agreement and to sign an additional agreement showing as to how the payments could be made.
In July this year, Sri Lanka signed a 1.1 billion dollar deal to sell a 70 percent stake of the strategic Hambantota port to China under a 99-year lease agreement.