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Message: <blockquote data-quote="monson" data-source="post: 20426146" data-attributes="member: 30005">China back with a bang: Old projects revived, new projects launched with aircraft purchases alsoMinisters are to soon give approval to a string of new arrangements which will see the return of China in a pre-eminent role in Sri Lanka’s economic development. This will be good news to former President Rajapaksa too. The projects he initiated with Chinese assistance in the Hambantota District will be carried through with the involvement of Chinese companies though the modalities are not known. These measures were worked out by Development Strategies and International Trade Minister Malik Samarawickrema during a visit to Beijing early this month.Arrangements are to be worked out with China’s IZP group to operate the Mahinda Rajapaksa International Airport, more commonly referred to as Mattala Airport. This group recently purchased Italy’s Parma International Airport. Mattala airport has been described in travel magazines as the only non-operational international airport in the world and was built with a Chinese loan of US $ 210 million. The airport has now become a standby facility whenever incoming aircraft are unable to land at the Bandaranaike International Airport due to bad weather conditions. Such usage has been mostly by SriLankan Airlines, the national carrier, already facing huge debts of its own.The Magampura Mahinda Rajapaksa port is to be operated by China Merchants Holding (International) Company Limited. This major conglomerate is based in Hong Kong and is engaged in a variety of business ventures like port operations, general and bulk cargo transportation, container and shipping business among others. The port was built at a cost of US$ 361 million. China’s Exim Bank funded 85 percent of the cost.Chinese loansThe Government found that the repayment of Chinese loans was becoming a burden since the airport and the port were not commercially viable ventures earning any income. They proposed to the Chinese Government that their loan commitments on these two projects be converted to equity. Whether the Chinese have accepted this offer or the projects will become joint ventures is not known. The stalled Colombo Port City project is also to be resumed most likely by October. Some issues in a proposed new agreement, Government sources said, were now being negotiated. One is an undertaking sought by China that no such project be undertaken 20 kilometres north or south of the port city. More extents of reclaimed land is being sought by China to offset over US$ 175 million due as compensation for work stoppage.In addition, two other multi-million dollar projects are also to get under way in the Hambantota area. One is a proposed Petroleum Refinery to be set up by Shan Dong Dongming Petrochemical Group. The group is described as a large scale petrochemical enterprise integrating crude oil processing, petrochemical industry and natural gas among others.The second major project proposed is a LNG (Liquefied Natural Gas) power plant to initially produce 500 megawatts of power to be extended later to 1000 megawatts. It is to be undertaken by China Machinery Engineering Corporation (CMEC), the same company that built the misfiring Lakvijaya (Norochcholai) coal fired power plant. This plant has been subject to repeated breakdowns though it was expected to augment hydropower resources to provide nearly half of the country’s electricity requirements. The 900 megawatts power production facility cost US$ 1.35 billion.The Government has also decided to enter into military deals with China to provide aircraft for the Sri Lanka Air Force (SLAF). Air Force Commander Air Marshal Gagan Bulathsinhala had sought to purchase six PT-6 single engine primary trainer aircraft from CATIC or China National Aero Technical Import Export Corporation. However, due to the adverse balance of payments situation the Cabinet of Ministers rejected the Defence Ministry’s recommendation to obtain the six aircraft. Instead, it decided to purchase two aircraft. The purchase of remaining aircraft will depend on the provisions for 2017-2019 medium-term budget, the ministers decided.The trainer aircraft are needed, particularly during peacetimes, to ensure pilots are trained. On August 2, 2000, the SLAF procured ten P-6 trainer aircraft in a package from CATIC. This cost US$ 4,353,273. Each trainer aircraft then cost US$ 300,000. In addition, two more engines and spares cost US$ 156,000 whilst spares cost a further US$ 60,000. A further US$ 200,000 were spent on spares, tools and the freight cost US$ 210,000. These purchases were also made from CATIC. Besides all this, the SLAF also obtained a repair facility for the P-6 trainers.- <a href="http://www.sundaytimes.lk/160717/columns/questions-over-whether-government-is-going-in-different-directions-201304.html" target="_blank">http://www.sundaytimes.lk/160717/columns/questions-over-whether-government-is-going-in-different-directions-201304.html</a></blockquote>

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