China-backed projects testament to Sri Lanka's mismanagement

[Jackdaws]

China is no Britain or France.

Not even remotely close. You are right.

 

[maithil]

It's simple. Newly installed Govts should just nationalize Chinese funded projects just like the Egyptians nationalized the Suez Canal to silence the Brits and the French. China should be free to take the case to ICJ or any other arbitration forum - their loan shark ways will get the Chinese cases thrown out.

With Rajpakshe clan out of power for foreseeable future, this does seem to be a prudent plan. Nationalize all Chinese funded projects including that port and cancel the leasing deal. I am sure new govt will find enough countries to support them .

 

[ziaulislam]

chinese loans accumulate less than 10% of total loans of Sri lanka

Problem with chinese projects is how they are done

The receiving country like pakistan or srilanka pitches a project mostly an infrstruture project which will be build by chinese company on chinese soft loan

Looks good right?
But its not as stringent as WB /AB or even chinese backed AIIB

best example is metro lahore vs metro peshawar

Two projects one built in 2yrs the other in 4yrs
One in profit, one in loss

Projects are done on speculation rather then solid return profit

The two examples above shows that..like there was no grantees that artifical srilanka island city will be hit..it can be a miss too and that it was

 

[Leishangthem]

It's simple. Newly installed Govts should just nationalize Chinese funded projects just like the Egyptians nationalized the Suez Canal to silence the Brits and the French. China should be free to take the case to ICJ or any other arbitration forum - their loan shark ways will get the Chinese cases thrown out.

It's obvious Indian education system and culture is a failure ,devoid of critical thinking or integrity.

But for nationalization, appropriate compensation for the nationalization of existing private businesses is mandated by the Charter of Economic Rights and Duties of States, adopted by the United Nations General Assembly in 1974.
Take Hambantota, SL gov have to pay 300m $ + 1 billion on top of that which EXIM paid for 70% stake ,so 1.3 b onwards for the 70% of remaining EXIM share on the port,SL already owns 30 %,so for the so-called failed port according to Indian media,SL have to pay 1.3 billion + for 70% of the remaining stake,what a brilliant proposal.

Many of the people clowning about chinese port takeover with debt, don't realize Chinese firm brought 70% stake on Hambantota ,for 1 billion $,like any typical business venture.

 

[Jackdaws]

It's obvious Indian education system and culture is a failure ,devoid of critical thinking or integrity.

But for nationalization, appropriate compensation for the nationalization of existing private businesses is mandated by the Charter of Economic Rights and Duties of States, adopted by the United Nations General Assembly in 1974.
Take Hambantota, SL gov have to pay 300m $ + 1 billion on top of that which EXIM paid for 70% stake ,so 1.3 b onwards for the 70% of remaining EXIM share on the port,SL already owns 30 %,so for the so-called failed port according to Indian media,SL have to pay 1.3 billion + for 70% of the remaining stake,what a brilliant proposal.

Many of the people clowning about chinese port takeover with debt, don't realize Chinese firm brought 70% stake on Hambantota ,for 1 billion $,like any typical business venture.

Lol. As opposed to Chinese education and culture - if one can even call it that with some generosity?

All states have sovereign rights over resources of national importance - go read Article 1803 of the UN. Only "appropriate compensation" will be provided.

Lol - were you the Economic Advisor to Xi?

 

[etylo]

No, the root cause is China does not challenge the host country on economic feasibility before it decides to fund a project. The money is often wasted on boondoggles like Hambantota, politically expedient but economically unviable.

Yeah, you French and the Westerners are just a bunch jealousy people, you are jealousy of Chinese investments and economic activities in Africa, South America, Mideast, South Asia and Southeast Asia. You shamelessly make up all these baseless fake stories about Chinese investments such as the infamous "Chinese debt traps" in the world.

 

[etylo]

We all know, the so called Chinese "debt traps" are fabricated and propagated by the sore losers Indians in the first place as usual to defame and discredit China in the world.

 

[Nan Yang]

I speak of business feasibility not engineering feasibility.

HAMBANTOTA, Sri Lanka — Every time Sri Lanka’s president, Mahinda Rajapaksa, turned to his Chinese allies for loans and assistance with an ambitious port project, the answer was yes. Yes, though feasibility studies said the port wouldn’t work. Yes, though other frequent lenders like India had refused. Yes, though Sri Lanka’s debt was ballooning rapidly under Mr. Rajapaksa. How China Got Sri Lanka to Cough Up a Port (Published 2018) A Times investigation into Sri Lanka’s handover of its Hambantota Port starkly illustrates how China turned an ally’s struggles to its strategic advantage. www.nytimes.com

​

When the port was under the Sri Lankan government, it was barely operational due to the lack of operational investments and incapable knowledge to start up and run a port of that scale. Sooner or later the port needed an operational partner with a comprehensive investment to meet its demands.


Hambantota Port in 2016 made revenue of $11.81m and incurred expenses of $10m as direct & administrative costs to report an operating profit of just $1.81m. CMPort invested in approx. $1.12bn to revive the port under a Public-Private Partnership. However, CMPort will have to spend at least $700–800m or more to bring the port to the operational level at its full capacity.

One year after “Hambantota International Port” (HIP) came under its new management, the port focused on roll-on - roll-off (ro-ro) operations and doubled its business, with a 136% increase in the volume of ro-ro vessels handled by the operational staff. The HIP has since diversified its services to include other port-related activities such as container Handling, General Cargo, Passenger, Bunkering, Bulk Terminal and Gas at initial stages.

The geographic positioning of HIP provides advantages not just for the shipping industry but also for import/export business in general, coupled with experienced handling to ship or transship finished goods to almost any destination in the region as the port can offer comparatively shorter timelines with just six to ten nautical miles (19km) to the world’s busiest maritime route between the Malacca Straits and the Suez Canal linking Asia and Europe.

Advantages in Hambantota includes competitive labor costs, freeport facilities, ample space for storage, dry weather throughout the year. This gives HIP its competitive edge to develop as a competitive regional maritime and logistics hub.

Given the shift of the maritime industry in the coming decades with regard to 2020 low sulphur cap regulations, Hambantota is an ideal location to invest in storage tanks, refineries and LNG bunkering facilities with higher capacity to support the global ship fleet. Moreover, IMO’s Internal GHG strategy aiming to decarbonize the industry by 2100, would give fresh opportunities for the HIP to operate as a “Green port” in the region.


These benefits were highlighted when Sinopec registered in Hambantota as ‘Fuel Oil Sri Lanka Co Ltd’ is one of the largest investments in Sri Lanka by China. while India’s Accord Group and Oman’s Ministry of Oil & Gas was interested in a 3.85USD billion deal to build a 200,000 barrel per day Oil Refinery near Hambantota International Port.

 

[StraightEdge]

I speak of business feasibility not engineering feasibility.

HAMBANTOTA, Sri Lanka — Every time Sri Lanka’s president, Mahinda Rajapaksa, turned to his Chinese allies for loans and assistance with an ambitious port project, the answer was yes. Yes, though feasibility studies said the port wouldn’t work. Yes, though other frequent lenders like India had refused. Yes, though Sri Lanka’s debt was ballooning rapidly under Mr. Rajapaksa. How China Got Sri Lanka to Cough Up a Port (Published 2018) A Times investigation into Sri Lanka’s handover of its Hambantota Port starkly illustrates how China turned an ally’s struggles to its strategic advantage. www.nytimes.com

There Is No Chinese ‘Debt Trap’ - The Atlantic

 

[dbc]

There Is No Chinese ‘Debt Trap’ - The Atlantic

did I say there was?

 

[Wood]

With Rajpakshe clan out of power for foreseeable future, this does seem to be a prudent plan. Nationalize all Chinese funded projects including that port and cancel the leasing deal. I am sure new govt will find enough countries to support them .

This is not possible for Sri Lanka. Robbing China on one hand and asking for alms on the other will not work

 

[dbc]

​

When the port was under the Sri Lankan government, it was barely operational due to the lack of operational investments and incapable knowledge to start up and run a port of that scale. Sooner or later the port needed an operational partner with a comprehensive investment to meet its demands.


Hambantota Port in 2016 made revenue of $11.81m and incurred expenses of $10m as direct & administrative costs to report an operating profit of just $1.81m. CMPort invested in approx. $1.12bn to revive the port under a Public-Private Partnership. However, CMPort will have to spend at least $700–800m or more to bring the port to the operational level at its full capacity.

One year after “Hambantota International Port” (HIP) came under its new management, the port focused on roll-on - roll-off (ro-ro) operations and doubled its business, with a 136% increase in the volume of ro-ro vessels handled by the operational staff. The HIP has since diversified its services to include other port-related activities such as container Handling, General Cargo, Passenger, Bunkering, Bulk Terminal and Gas at initial stages.

The geographic positioning of HIP provides advantages not just for the shipping industry but also for import/export business in general, coupled with experienced handling to ship or transship finished goods to almost any destination in the region as the port can offer comparatively shorter timelines with just six to ten nautical miles (19km) to the world’s busiest maritime route between the Malacca Straits and the Suez Canal linking Asia and Europe.

Advantages in Hambantota includes competitive labor costs, freeport facilities, ample space for storage, dry weather throughout the year. This gives HIP its competitive edge to develop as a competitive regional maritime and logistics hub.

Given the shift of the maritime industry in the coming decades with regard to 2020 low sulphur cap regulations, Hambantota is an ideal location to invest in storage tanks, refineries and LNG bunkering facilities with higher capacity to support the global ship fleet. Moreover, IMO’s Internal GHG strategy aiming to decarbonize the industry by 2100, would give fresh opportunities for the HIP to operate as a “Green port” in the region.


These benefits were highlighted when Sinopec registered in Hambantota as ‘Fuel Oil Sri Lanka Co Ltd’ is one of the largest investments in Sri Lanka by China. while India’s Accord Group and Oman’s Ministry of Oil & Gas was interested in a 3.85USD billion deal to build a 200,000 barrel per day Oil Refinery near Hambantota International Port.

it should be obvious by now that the Hambantota port is unlikely to make enough revenue to pay off the investment.

 

[Leishangthem]

Lol. As opposed to Chinese education and culture - if one can even call it that with some generosity?

All states have sovereign rights over resources of national importance - go read Article 1803 of the UN. Only "appropriate compensation" will be provided.

Lol - were you the Economic Advisor to Xi?

Anything can be claimed as national importance. Compensation has to be paid regardless.
Why China still has Darwin port in their nemesis Australia?
With your logic ,nobody will ever invest in port or infrastructure anywhere.

 

[Wergeland]

It's simple. Newly installed Govts should just nationalize Chinese funded projects just like the Egyptians nationalized the Suez Canal to silence the Brits and the French. China should be free to take the case to ICJ or any other arbitration forum - their loan shark ways will get the Chinese cases thrown out.

Good suggestion.
Sri Lanka should kick out all Indians too from their beautiful island.

 

[Kyusuibu Honbu]

I've also had this suspicion that there could be off book loans. Some CPEC related posts here have insinuated that there could be sovereign backed private debt from China for Pakistan. The same can also be true for Sri Lanka.

But from the perspective of the Chinese, they only offer the loans and make them available to the poor countries. The rulers of these countries are the first people to be blamed for selecting these projects. It is often the case that the hapless financial situation for these countries mean that there is almost no external investment. Rulers will need fancy projects to show 'progress' to people and get reelected next time. China merely presents an opportunity for such projects and does not force them upon anyone.

Chinese are simply following Russian imperialism playbook here, which they themselves were a victim of

Li–Lobanov Treaty

After the first Sino Japanese war, Chinese were a bankrupt nation due to the indemnity owed to Japan

Russians seeing an opportunity for more peaceful expansion of its buffers agreed to provide loans to China in return for following concessions in Northeast China-

• Leasing Lushan port to Russia
• Russian police and personal to exercise Russian Law over these regions
• Russian troops deployment to protect Russian interests

Which pretty much meant Northeast China is only Chinese in name

CCP today is aping these strategies of colonial and imperial powers

Its well aware Sri Lanka cannot affords these ports and eventually will settle for several concessions - diplomatic, territorial etc


Also Sri Lanka was invaded by Chinese in the past during the Ming era
Ming–Kotte War
The Language Chinese used for Sri Lankans is interesting

Straight-away, their dens and hideouts we ravaged,
And made captive that entire country,
Bringing back to our august capital,
Their women, children, families and retainers, leaving not one,
Cleaning out in a single sweep those noxious pests, as if winnowing chaff from grain...
These insignificant worms, deserving to die ten thousand times over, trembling in fear...
Did not even merit the punishment of Heaven.
Thus the august emperor spared their lives,
And they humbly kowtowed, making crude sounds and
Praising the sage-like virtue of the imperial Ming ruler.

— Yang Rong (1515) about the confrontation in Ceylon


This provided them a outpost for further voyages to southern Africans kingdoms

In today's era, this will be an outpost for monitoring India, Deigo Garcia and also Chinese interests in southern Africa.

@Jackdaws above details might be of your interest