Sri Lanka takes next step to opening strategic China-built port
COLOMBO (Reuters) – Sri Lanka will start storing bunker fuel at the $1.5 billion Hambantota port in June, a senior official said, after years of delays to the Chinese-built installation that sits on strategic shipping lanes, and a key step to making it commercially viable.
The state-run Sri Lanka Ports Authority (SLPA) originally had plans to open the facility for ship fuel in May 2011, six months after President Mahinda Rajapaksa launched the port in his home town on his 65th birthday.
“We are about to get the test samples in March. Then we will do the trials. After that we will start proper bunkering operation in June,” Priyath Wickrama, chairman of the SLPA told Reuters in an interview.
The $130 million storage project contains eight tanks of bunker oil for ships and six tanks of aviation fuel and LPG.
The port is envisioned as a refuelling and service point for cargo ships which pass a few kilometres away off the southern tip of the Indian Ocean island nation, on one of the world’s busiest East-West shipping lanes.
The growing influence of China in Sri Lanka has worried India, a neighbour that feels hemmed in by a string of similar port developments stretching from Myanmar to Pakistan and that it fears give the Chinese navy a strategic boost in the region. However, the ports are designed for commercial operations and are mostly not yet fully operational.
China has lent $400 million for the first phase of the new port in Hambantota and another $810 million has been given for the second phase with China Communications Construction Company as the contractor.
Wickrama said the expected handling volume in 2013 is about 45,000 metric tonnes (mt) of ship fuel, rising to 125,000 mt in 2015. China Exim Bank has loaned $77 million for the terminal, which the ports authority will operate.
The port is part of Rajapaksa’s push to turn Hambantota, a fishing village ravaged by the 2004 tsunami, into one of Asia’s leading commercial cities. Hambantota is set to be Sri Lanka’s biggest port once the second phase is completed.
Rajapaksa’s ambitious plans for his home town following the end of three decades of civil war in 2009 have already helped build the country’s second international airport, a 35,000-seater cricket stadium that hosted 2011 World Cup games, and a massive convention centre, mostly financed and built by China.
The port, airport and the stadium are all named after Rajapaksa, who is still hailed by many for winning the war against Tamil Tiger separatists, despite international concerns about rights abuses in the intense final months of hostilities.
The Mahinda Rajapaksa International Airport is due to open on March 18, after being built with a $209 million Chinese loan, with China Harbour Engineering Company building the first phase.