Lease to China[edit]
On July 28, 2017, Prime Minister
Ranil Wickramasinghe announced that lease would be signed the next day
[52] and on July 29, 2017, Sri Lanka Ports Authority (SLPA) and China Merchant Port Holdings signed an agreement on the Hambantota Port to lease the port to China Merchant Port Holdings for 99 years. The government of Sri Lanka kept the ownership of the port and lease it for 99 years.
The deal gave the Sri Lankan government $1.4 billion, that they will be using to pay off the debt to China. This will stop the Sri Lanka Ports Authority paying off debt of Magampura Port from the profit of the Colombo port.
[53] The deal had been delayed by several months over concerns that the port could be used for military purposes and also government had to face huge opposition to this deal from trade unions and opposition political parties who called it a sellout of the country's national assets to China.
[54][55] The large Chinese loans, inability of the Sri Lankan government to service the loans, and subsequent 99-year Chinese lease on the port have led to accusations that China was practicing
Debt trap diplomacy.
[56][57]