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Mabeberu, Vibaraka wa Mabeberu, Wazalendo wa Hayati Magufuli, na Mradi wa Bandari ya Bagamoyo
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Mpe na hii anatuchosha na propaganda zake huyu ndugai
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A cargo ship navigating one of the world’s busiest shipping lanes, near Hambantota, Sri Lanka, in May.Credit...Adam Dean for The New York Times
By Maria Abi-Habib
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.
Over years of construction and renegotiation with China Harbor Engineering Company, one of Beijing’s largest state-owned enterprises, the Hambantota Port Development Project distinguished itself mostly by failing, as predicted. With tens of thousands of ships passing by along one of the world’s busiest shipping lanes, the port drew only 34 ships in 2012.
And then the port became China’s.
Mr. Rajapaksa was voted out of office in 2015, but Sri Lanka’s new government struggled to make payments on the debt he had taken on. Under heavy pressure and after months of negotiations with the Chinese, the government handed over the port and 15,000 acres of land around it for 99 years in December.
The transfer gave China control of territory just a few hundred miles off the shores of a rival, India, and a strategic foothold along a critical commercial and military waterway.
The case is one of the most vivid examples of China’s ambitious use of loans and aid to gain influence around the world — and of its willingness to play hardball to collect.
The debt deal also intensified some of the harshest accusations about President Xi Jinping’s signature Belt and Road Initiative: that the global investment and lending program amounts to a debt trap for vulnerable countries around the world, fueling corruption and autocratic behavior in struggling democracies.
Image
Former President Mahinda Rajapaksa of Sri Lanka, center, holding court at a wedding in Colombo in June.Credit...Adam Dean for The New York Times
Months of interviews with Sri Lankan, Indian, Chinese and Western officials and analysis of documents and agreements stemming from the port project present a stark illustration of how China and the companies under its control ensured their interests in a small country hungry for financing.
• During the 2015 Sri Lankan elections, large payments from the Chinese port construction fund flowed directly to campaign aides and activities for Mr. Rajapaksa, who had agreed to Chinese terms at every turn and was seen as an important ally in China’s efforts to tilt influence away from India in South Asia. The payments were confirmed by documents and cash checks detailed in a government investigation seen by The New York Times.
• Though Chinese officials and analysts have insisted that China’s interest in the Hambantota port is purely commercial, Sri Lankan officials said that from the start, the intelligence and strategic possibilities of the port’s location were part of the negotiations.
• Initially moderate terms for lending on the port project became more onerous as Sri Lankan officials asked to renegotiate the timeline and add more financing. And as Sri Lankan officials became desperate to get the debt off their books in recent years, the Chinese demands centered on handing over equity in the port rather than allowing any easing of terms.
• Though the deal erased roughly $1 billion in debt for the port project, Sri Lanka is now in more debt to China than ever, as other loans have continued and rates remain much higher than from other international lenders.
Mr. Rajapaksa and his aides did not respond to multiple requests for comment, made over several months, for this article. Officials for China Harbor also would not comment.
Estimates by the Sri Lankan Finance Ministry paint a bleak picture: This year, the government is expected to generate $14.8 billion in revenue, but its scheduled debt repayments, to an array of lenders around the world, come to $12.3 billion.
“John Adams said infamously that a way to subjugate a country is through either the sword or debt. China has chosen the latter,” said Brahma Chellaney, an analyst who often advises the Indian government and is affiliated with the Center for Policy Research, a think tank in New Delhi.
Indian officials, in particular, fear that Sri Lanka is struggling so much that the Chinese government may be able to dangle debt relief in exchange for its military’s use of assets like the Hambantota port — though the final lease agreement forbids military activity there without Sri Lanka’s invitation.
“The only way to justify the investment in Hambantota is from a national security standpoint — that they will bring the People’s Liberation Army in,” said Shivshankar Menon, who served as India’s foreign secretary and then its national security adviser as the Hambantota port was being built.
Image
The Hambantota Port gets only a small percentage of Sri Lanka’s port business, overshadowed by the main complex in the capital.Credit...Adam Dean for The New York Times
Image
Sri Lankan workers processing cars being unloaded from a ship at Hambantota Port.Credit...Adam Dean for The New York Times
Mr. Rajapaksa, who was elected in 2005, presided over the last years of the war, when Sri Lanka became increasingly isolated by accusations of human rights abuses. Under him, Sri Lanka relied heavily on China for economic support, military equipment and political cover at the United Nations to block potential sanctions.
The war ended in 2009, and as the country emerged from the chaos, Mr. Rajapaksa and his family consolidated their hold. At the height of Mr. Rajapaksa’s tenure, the president and his three brothers controlled many government ministries and around 80 percent of total government spending. Governments like China negotiated directly with them.
So when the president began calling for a vast new port development project at Hambantota, his sleepy home district, the few roadblocks in its way proved ineffective.
From the start, officials questioned the wisdom of a second major port, in a country a quarter the size of Britain and with a population of 22 million, when the main port in the capital was thriving and had room to expand. Feasibility studies commissioned by the government had starkly concluded that a port at Hambantota was not economically viable.
“They approached us for the port at the beginning, and Indian companies said no,” said Mr. Menon, the former Indian foreign secretary. “It was an economic dud then, and it’s an economic dud now.”
But Mr. Rajapaksa greenlighted the project, then boasted in a news release that he had defied all caution — and that China was on board.
The Sri Lanka Ports Authority began devising what officials believed was a careful, economically sound plan in 2007, according to an official involved in the project. It called for a limited opening for business in 2010, and for revenue to be coming in before any major expansion.
The first major loan it took on the project came from the Chinese government’s Export-Import Bank, or Exim, for $307 million. But to obtain the loan, Sri Lanka was required to accept Beijing’s preferred company, China Harbor, as the port’s builder, according to a United States Embassy cable from the time, leaked to WikiLeaks.
That is a typical demand of China for its projects around the world, rather than allowing an open bidding process. Across the region, Beijing’s government is lending out billions of dollars, being repaid at a premium to hire Chinese companies and thousands of Chinese workers, according to officials across the region.
There were other strings attached to the loan, as well, in a sign that China saw strategic value in the Hambantota port from the beginning.
Nihal Rodrigo, a former Sri Lankan foreign secretary and ambassador to China, said that discussions with Chinese officials at the time made it clear that intelligence sharing was an integral, if not public, part of the deal. In an interview with The Times, Mr. Rodrigo characterized the Chinese line as, “We expect you to let us know who is coming and stopping here.”
In later years, Chinese officials and the China Harbor company went to great lengths to keep relations strong with Mr. Rajapaksa, who for years had faithfully acquiesced to such terms.
In the final months of Sri Lanka’s 2015 election, China’s ambassador broke with diplomatic norms and lobbied voters, even caddies at Colombo’s premier golf course, to support Mr. Rajapaksa over the opposition, which was threatening to tear up economic agreements with the Chinese government.
As the January election inched closer, large payments started to flow toward the president’s circle.
At least $7.6 million was dispensed from China Harbor’s account at Standard Chartered Bank to affiliates of Mr. Rajapaksa’s campaign, according to a document, seen by The Times, from an active internal government investigation. The document details China Harbor’s bank account number — ownership of which was verified — and intelligence gleaned from questioning of the people to whom the checks were made out.
With 10 days to go before polls opened, around $3.7 million was distributed in checks: $678,000 to print campaign T-shirts and other promotional material and $297,000 to buy supporters gifts, including women’s saris. Another $38,000 was paid to a popular Buddhist monk who was supporting Mr. Rajapaksa’s electoral bid, while two checks totaling $1.7 million were delivered by volunteers to Temple Trees, his official residence.
Most of the payments were from a subaccount controlled by China Harbor, named “HPDP Phase 2,” shorthand for Hambantota Port Development Project.
Image
An expressway extension to Hambantota Port. Chinese analysts have not given up the view that the port could become profitable.Credit...Adam Dean for The New York Times
Some Chinese officials have become concerned that the nearly institutional graft surrounding such projects represents a liability for China, and raises the bar needed for profitability. President Xi acknowledged the worry in a speech last year, saying, “We will also strengthen international cooperation on anticorruption in order to build the Belt and Road Initiative with integrity.”
In Bangladesh, for example, officials said in January that China Harbor would be banned from future contracts over accusations that the company attempted to bribe an official at the ministry of roads, stuffing $100,000 into a box of tea, government officials said in interviews. And China Harbor’s parent company, China Communications Construction Company, was banned for eight years in 2009 from bidding on World Bank projects because of corrupt practices in the Philippines.
Since the port seizure in Sri Lanka, Chinese officials have started suggesting that Belt and Road is not an open-ended government commitment to finance development across three continents.
“If we cannot manage the risk well, the Belt and Road projects cannot go far or well,” said Jin Qi, the chairwoman of the Silk Road Fund, a large state-owned investment fund, during the China Development Forum in late March.
In Sri Lanka’s case, port officials and Chinese analysts have also not given up the view that the Hambantota port could become profitable, or at least strengthen China’s trade capacity in the region.
Ray Ren, China Merchant Port’s representative in Sri Lanka and the head of the Hambantota port’s operations, insisted that “the location of Sri Lanka is ideal for international trade.” And he dismissed the negative feasibility studies, saying they were done many years ago when Hambantota was “a small fishing hamlet.”
Hu Shisheng, the director of South Asia studies at the China Institutes of Contemporary International Relations, said that China clearly recognized the strategic value of the Hambantota port. But he added: “Once China wants to exert its geostrategic value, the strategic value of the port will be gone. Big countries cannot fight in Sri Lanka — it would be wiped out.”
Although the Hambantota port first opened in a limited way in 2010, before the Belt and Road Initiative was announced, the Chinese government quickly folded the project into the global program.
Shortly after the handover ceremony in Hambantota, China’s state news agency released a boastful video on Twitter, proclaiming the deal “another milestone along the path of #BeltandRoad.”
Image
The Mahinda Rajapaksa International Cricket Stadium in Hambantota. The stadium has more seats than the population of the area’s main town.Credit...Adam Dean for The New York Times
Image
Pilgrim monks visiting the largely empty Mattala Rajapaksa International Airport, just 150 miles southeast from the country’s main airport.Credit...Adam Dean for The New York Times
A cricket stadium with more seats than the population of Hambantota’s district capital marks the skyline, as does a large international airport — which in June lost the only daily commercial flight it had left when FlyDubai airline ended the route. A highway that cuts through the district is traversed by elephants and used by farmers to rake out and dry the rice plucked fresh from their paddies.
Mr. Rajapaksa’s advisers had laid out a methodical approach to how the port might expand after opening, ensuring that some revenue would be coming in before taking on much more debt.
But in 2009, the president had grown impatient. His 65th birthday was approaching the following year, and to mark the occasion he wanted a grand opening at the Hambantota port — including the beginning of an ambitious expansion 10 years ahead of the Port Authority’s original timeline.
Chinese laborers began working day and night to get the port ready, officials said. But when workers dredged the land and then flooded it to create the basin of the port, they had not taken into account a large boulder that partly blocked the entrance, preventing the entry of large ships, like oil tankers, that the port’s business model relied on.
Ports Authority officials, unwilling to cross the president, quickly moved ahead anyway. The Hambantota port opened in an elaborate celebration on Nov. 18, 2010, Mr. Rajapaksa’s birthday. Then it sat waiting for business while the rock blocked it.
China Harbor blasted the boulder a year later, at a cost of $40 million, an exorbitant price that raised concerns among diplomats and government officials. Some openly speculated about whether the company was simply overcharging or the price tag included kickbacks to Mr. Rajapaksa.
By 2012, the port was struggling to attract ships — which preferred to berth nearby at the Colombo port — and construction costs were rising as the port began expanding ahead of schedule. The government decreed later that year that ships carrying car imports bound for Colombo port would instead offload their cargo at Hambantota to kick-start business there. Still, only 34 ships berthed at Hambantota in 2012, compared with 3,667 ships at the Colombo port, according to a Finance Ministry annual report.
“When I came to the government, I called the minister of national planning and asked for the justification of Hambantota Port,” Harsha de Silva, the state minister for national policies and economic affairs, said in an interview. “She said, ‘We were asked to do it, so we did it.’ ”
Determined to keep expanding the port, Mr. Rajapaksa went back to the Chinese government in 2012, asking for $757 million.
The Chinese agreed again. But this time, the terms were much steeper.
The first loan, at $307 million, had originally come at a variable rate that usually settled above 1 or 2 percent after the global financial crash in 2008. (For comparison, rates on similar Japanese loans for infrastructure projects run below half a percent.)
But to secure fresh funding, that initial loan was renegotiated to a much higher 6.3 percent fixed rate. Mr. Rajapaksa acquiesced.
The rising debt and project costs, even as the port was struggling, handed Sri Lanka’s political opposition a powerful issue, and it campaigned heavily on suspicions about China. Mr. Rajapaksa lost the election.
The incoming government, led by President Maithripala Sirisena, came to office with a mandate to scrutinize Sri Lanka’s financial deals. It also faced a daunting amount of debt: Under Mr. Rajapaksa, the country’s debt had increased threefold, to $44.8 billion when he left office. And for 2015 alone, a $4.68 billion payment was due at year’s end.
“We inherited a purposefully run-down economy — the revenues were insufficient to pay the interest charges, let alone capital repayment,” said Ravi Karunanayake, who was finance minister during the new government’s first year in office.
“We did keep taking loans,” he added. “A new government can’t just stop loans. It’s a relay; you need to take them until economic discipline is introduced.”
The Central Bank estimated that Sri Lanka owed China about $3 billion last year. But Nishan de Mel, an economist at Verité Research, said some of the debts were off government books and instead registered as part of individual projects. He estimated that debt owed to China could be as much as $5 billion and was growing every year. In May, Sri Lanka took a new $1 billion loan from China Development Bank to help make its coming debt payment.
Government officials began meeting in 2016 with their Chinese counterparts to strike a deal, hoping to get the port off Sri Lanka’s balance sheet and avoid outright default. But the Chinese demanded that a Chinese company take a dominant equity share in the port in return, Sri Lankan officials say — writing down the debt was not an option China would accept.
When Sri Lanka was given a choice, it was over which state-owned company would take control: either China Harbor or China Merchants Port, according to the final agreement, a copy of which was obtained by The Times, although it was never released publicly in full.
Chinese workers in their dormitory in Colombo.Credit...Adam Dean for The New York Times
China Merchants got the contract, and it immediately pressed for more: Company officials demanded 15,000 acres of land around the port to build an industrial zone, according to two officials with knowledge of the negotiations. The Chinese company argued that the port itself was not worth the $1.1 billion it would pay for its equity — money that would close out Sri Lanka’s debt on the port.
Some government officials bitterly opposed the terms, but there was no leeway, according to officials involved in the negotiations. The new agreement was signed in July 2017, and took effect in December.
The deal left some appearance of Sri Lankan ownership: Among other things, it created a joint company to manage the port’s operations and collect revenue, with 85 percent owned by China Merchants Port and the remaining 15 percent controlled by Sri Lanka’s government.
But lawyers specializing in port acquisitions said Sri Lanka’s small stake meant little, given the leverage that China Merchants Port retained over board personnel and operating decisions.
When the agreement was initially negotiated, it left open whether the port and surrounding land could be used by the Chinese military, which Indian officials asked the Sri Lankan government to explicitly forbid. The final agreement bars foreign countries from using the port for military purposes unless granted permission by the government in Colombo.
That clause is there because Chinese Navy submarines had already come calling to Sri Lanka.
That was dramatically demonstrated toward the end of Mr. Rajapaksa’s term, in 2014. Chinese submarines docked at the harborthe same day that Prime Minister Shinzo Abe of Japan was visiting Colombo, in what was seen across the region as a menacing signal from Beijing.
When the new Sri Lankan government came to office, it sought assurances that the port would never again welcome Chinese submarines — of particular concern because they are difficult to detect and often used for intelligence gathering. But Sri Lankan officials had little real control.
Now, the handover of Hambantota to the Chinese has kept alive concerns about possible military use — particularly as China has continued to militarize island holdings around the South China Sea despite earlier pledges not to.
Sri Lankan officials are quick to point out that the agreement explicitly rules out China’s military use of the site. But others also note that Sri Lanka’s government, still heavily indebted to China, could be pressured to allow it.
And, as Mr. de Silva, the state minister for national policies and economic affairs, put it, “Governments can change.”
Now, he and others are watching carefully as Mr. Rajapaksa, China’s preferred partner in Sri Lanka, has been trying to stage a political comeback. The former president’s new opposition party swept municipal elections in February. Presidential elections are coming up next year, and general elections in 2020.
Although Mr. Rajapaksa is barred from running again because of term limits, his brother, Gotabaya Rajapaksa, the former defense secretary, appears to be readying to take the mantle.
“It will be Mahinda Rajapaksa’s call. If he says it’s one of the brothers, that person will have a very strong claim,” said Ajith Nivard Cabraal, the central bank governor under Mr. Rajapaksa’s government, who still advises the family. “Even if he’s no longer the president, as the Constitution is structured, Mahinda will be the main power base.”
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How China Got Sri Lanka to Cough Up a Port
A cargo ship navigating one of the world’s busiest shipping lanes, near Hambantota, Sri Lanka, in May.Credit...Adam Dean for The New York Times
By Maria Abi-Habib
- June 25, 2018
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.
Over years of construction and renegotiation with China Harbor Engineering Company, one of Beijing’s largest state-owned enterprises, the Hambantota Port Development Project distinguished itself mostly by failing, as predicted. With tens of thousands of ships passing by along one of the world’s busiest shipping lanes, the port drew only 34 ships in 2012.
And then the port became China’s.
Mr. Rajapaksa was voted out of office in 2015, but Sri Lanka’s new government struggled to make payments on the debt he had taken on. Under heavy pressure and after months of negotiations with the Chinese, the government handed over the port and 15,000 acres of land around it for 99 years in December.
The transfer gave China control of territory just a few hundred miles off the shores of a rival, India, and a strategic foothold along a critical commercial and military waterway.
The case is one of the most vivid examples of China’s ambitious use of loans and aid to gain influence around the world — and of its willingness to play hardball to collect.
The debt deal also intensified some of the harshest accusations about President Xi Jinping’s signature Belt and Road Initiative: that the global investment and lending program amounts to a debt trap for vulnerable countries around the world, fueling corruption and autocratic behavior in struggling democracies.
Image
Former President Mahinda Rajapaksa of Sri Lanka, center, holding court at a wedding in Colombo in June.Credit...Adam Dean for The New York Times
Months of interviews with Sri Lankan, Indian, Chinese and Western officials and analysis of documents and agreements stemming from the port project present a stark illustration of how China and the companies under its control ensured their interests in a small country hungry for financing.
• During the 2015 Sri Lankan elections, large payments from the Chinese port construction fund flowed directly to campaign aides and activities for Mr. Rajapaksa, who had agreed to Chinese terms at every turn and was seen as an important ally in China’s efforts to tilt influence away from India in South Asia. The payments were confirmed by documents and cash checks detailed in a government investigation seen by The New York Times.
• Though Chinese officials and analysts have insisted that China’s interest in the Hambantota port is purely commercial, Sri Lankan officials said that from the start, the intelligence and strategic possibilities of the port’s location were part of the negotiations.
• Initially moderate terms for lending on the port project became more onerous as Sri Lankan officials asked to renegotiate the timeline and add more financing. And as Sri Lankan officials became desperate to get the debt off their books in recent years, the Chinese demands centered on handing over equity in the port rather than allowing any easing of terms.
• Though the deal erased roughly $1 billion in debt for the port project, Sri Lanka is now in more debt to China than ever, as other loans have continued and rates remain much higher than from other international lenders.
Mr. Rajapaksa and his aides did not respond to multiple requests for comment, made over several months, for this article. Officials for China Harbor also would not comment.
Estimates by the Sri Lankan Finance Ministry paint a bleak picture: This year, the government is expected to generate $14.8 billion in revenue, but its scheduled debt repayments, to an array of lenders around the world, come to $12.3 billion.
“John Adams said infamously that a way to subjugate a country is through either the sword or debt. China has chosen the latter,” said Brahma Chellaney, an analyst who often advises the Indian government and is affiliated with the Center for Policy Research, a think tank in New Delhi.
Indian officials, in particular, fear that Sri Lanka is struggling so much that the Chinese government may be able to dangle debt relief in exchange for its military’s use of assets like the Hambantota port — though the final lease agreement forbids military activity there without Sri Lanka’s invitation.
“The only way to justify the investment in Hambantota is from a national security standpoint — that they will bring the People’s Liberation Army in,” said Shivshankar Menon, who served as India’s foreign secretary and then its national security adviser as the Hambantota port was being built.
Image
The Hambantota Port gets only a small percentage of Sri Lanka’s port business, overshadowed by the main complex in the capital.Credit...Adam Dean for The New York Times
Image
Sri Lankan workers processing cars being unloaded from a ship at Hambantota Port.Credit...Adam Dean for The New York Times
An Engaged Ally
The relationship between China and Sri Lanka had long been amicable, with Sri Lanka an early recognizer of Mao’s Communist government after the Chinese Revolution. But it was during a more recent conflict — Sri Lanka’s brutal 26-year civil war with ethnic Tamil separatists — that China became indispensable.Mr. Rajapaksa, who was elected in 2005, presided over the last years of the war, when Sri Lanka became increasingly isolated by accusations of human rights abuses. Under him, Sri Lanka relied heavily on China for economic support, military equipment and political cover at the United Nations to block potential sanctions.
The war ended in 2009, and as the country emerged from the chaos, Mr. Rajapaksa and his family consolidated their hold. At the height of Mr. Rajapaksa’s tenure, the president and his three brothers controlled many government ministries and around 80 percent of total government spending. Governments like China negotiated directly with them.
So when the president began calling for a vast new port development project at Hambantota, his sleepy home district, the few roadblocks in its way proved ineffective.
From the start, officials questioned the wisdom of a second major port, in a country a quarter the size of Britain and with a population of 22 million, when the main port in the capital was thriving and had room to expand. Feasibility studies commissioned by the government had starkly concluded that a port at Hambantota was not economically viable.
“They approached us for the port at the beginning, and Indian companies said no,” said Mr. Menon, the former Indian foreign secretary. “It was an economic dud then, and it’s an economic dud now.”
But Mr. Rajapaksa greenlighted the project, then boasted in a news release that he had defied all caution — and that China was on board.
The Sri Lanka Ports Authority began devising what officials believed was a careful, economically sound plan in 2007, according to an official involved in the project. It called for a limited opening for business in 2010, and for revenue to be coming in before any major expansion.
The first major loan it took on the project came from the Chinese government’s Export-Import Bank, or Exim, for $307 million. But to obtain the loan, Sri Lanka was required to accept Beijing’s preferred company, China Harbor, as the port’s builder, according to a United States Embassy cable from the time, leaked to WikiLeaks.
That is a typical demand of China for its projects around the world, rather than allowing an open bidding process. Across the region, Beijing’s government is lending out billions of dollars, being repaid at a premium to hire Chinese companies and thousands of Chinese workers, according to officials across the region.
There were other strings attached to the loan, as well, in a sign that China saw strategic value in the Hambantota port from the beginning.
Nihal Rodrigo, a former Sri Lankan foreign secretary and ambassador to China, said that discussions with Chinese officials at the time made it clear that intelligence sharing was an integral, if not public, part of the deal. In an interview with The Times, Mr. Rodrigo characterized the Chinese line as, “We expect you to let us know who is coming and stopping here.”
In later years, Chinese officials and the China Harbor company went to great lengths to keep relations strong with Mr. Rajapaksa, who for years had faithfully acquiesced to such terms.
In the final months of Sri Lanka’s 2015 election, China’s ambassador broke with diplomatic norms and lobbied voters, even caddies at Colombo’s premier golf course, to support Mr. Rajapaksa over the opposition, which was threatening to tear up economic agreements with the Chinese government.
As the January election inched closer, large payments started to flow toward the president’s circle.
At least $7.6 million was dispensed from China Harbor’s account at Standard Chartered Bank to affiliates of Mr. Rajapaksa’s campaign, according to a document, seen by The Times, from an active internal government investigation. The document details China Harbor’s bank account number — ownership of which was verified — and intelligence gleaned from questioning of the people to whom the checks were made out.
With 10 days to go before polls opened, around $3.7 million was distributed in checks: $678,000 to print campaign T-shirts and other promotional material and $297,000 to buy supporters gifts, including women’s saris. Another $38,000 was paid to a popular Buddhist monk who was supporting Mr. Rajapaksa’s electoral bid, while two checks totaling $1.7 million were delivered by volunteers to Temple Trees, his official residence.
Most of the payments were from a subaccount controlled by China Harbor, named “HPDP Phase 2,” shorthand for Hambantota Port Development Project.
Image
An expressway extension to Hambantota Port. Chinese analysts have not given up the view that the port could become profitable.Credit...Adam Dean for The New York Times
China’s Network
After nearly five years of helter-skelter expansion for China’s Belt and Road Initiative across the globe, Chinese officials are quietly trying to take stock of how many deals have been done and what the country’s financial exposure might be. There is no comprehensive picture of that yet, said one Chinese economic policymaker, who like many other officials would speak about Chinese policy only on the condition of anonymity.Some Chinese officials have become concerned that the nearly institutional graft surrounding such projects represents a liability for China, and raises the bar needed for profitability. President Xi acknowledged the worry in a speech last year, saying, “We will also strengthen international cooperation on anticorruption in order to build the Belt and Road Initiative with integrity.”
In Bangladesh, for example, officials said in January that China Harbor would be banned from future contracts over accusations that the company attempted to bribe an official at the ministry of roads, stuffing $100,000 into a box of tea, government officials said in interviews. And China Harbor’s parent company, China Communications Construction Company, was banned for eight years in 2009 from bidding on World Bank projects because of corrupt practices in the Philippines.
Since the port seizure in Sri Lanka, Chinese officials have started suggesting that Belt and Road is not an open-ended government commitment to finance development across three continents.
“If we cannot manage the risk well, the Belt and Road projects cannot go far or well,” said Jin Qi, the chairwoman of the Silk Road Fund, a large state-owned investment fund, during the China Development Forum in late March.
In Sri Lanka’s case, port officials and Chinese analysts have also not given up the view that the Hambantota port could become profitable, or at least strengthen China’s trade capacity in the region.
Ray Ren, China Merchant Port’s representative in Sri Lanka and the head of the Hambantota port’s operations, insisted that “the location of Sri Lanka is ideal for international trade.” And he dismissed the negative feasibility studies, saying they were done many years ago when Hambantota was “a small fishing hamlet.”
Hu Shisheng, the director of South Asia studies at the China Institutes of Contemporary International Relations, said that China clearly recognized the strategic value of the Hambantota port. But he added: “Once China wants to exert its geostrategic value, the strategic value of the port will be gone. Big countries cannot fight in Sri Lanka — it would be wiped out.”
Although the Hambantota port first opened in a limited way in 2010, before the Belt and Road Initiative was announced, the Chinese government quickly folded the project into the global program.
Shortly after the handover ceremony in Hambantota, China’s state news agency released a boastful video on Twitter, proclaiming the deal “another milestone along the path of #BeltandRoad.”
Image
The Mahinda Rajapaksa International Cricket Stadium in Hambantota. The stadium has more seats than the population of the area’s main town.Credit...Adam Dean for The New York Times
Image
Pilgrim monks visiting the largely empty Mattala Rajapaksa International Airport, just 150 miles southeast from the country’s main airport.Credit...Adam Dean for The New York Times
A Port to Nowhere
The seaport is not the only grand project built with Chinese loans in Hambantota, a sparsely populated area on Sri Lanka’s southeastern coast that is still largely overrun by jungle.A cricket stadium with more seats than the population of Hambantota’s district capital marks the skyline, as does a large international airport — which in June lost the only daily commercial flight it had left when FlyDubai airline ended the route. A highway that cuts through the district is traversed by elephants and used by farmers to rake out and dry the rice plucked fresh from their paddies.
Mr. Rajapaksa’s advisers had laid out a methodical approach to how the port might expand after opening, ensuring that some revenue would be coming in before taking on much more debt.
But in 2009, the president had grown impatient. His 65th birthday was approaching the following year, and to mark the occasion he wanted a grand opening at the Hambantota port — including the beginning of an ambitious expansion 10 years ahead of the Port Authority’s original timeline.
Chinese laborers began working day and night to get the port ready, officials said. But when workers dredged the land and then flooded it to create the basin of the port, they had not taken into account a large boulder that partly blocked the entrance, preventing the entry of large ships, like oil tankers, that the port’s business model relied on.
Ports Authority officials, unwilling to cross the president, quickly moved ahead anyway. The Hambantota port opened in an elaborate celebration on Nov. 18, 2010, Mr. Rajapaksa’s birthday. Then it sat waiting for business while the rock blocked it.
China Harbor blasted the boulder a year later, at a cost of $40 million, an exorbitant price that raised concerns among diplomats and government officials. Some openly speculated about whether the company was simply overcharging or the price tag included kickbacks to Mr. Rajapaksa.
By 2012, the port was struggling to attract ships — which preferred to berth nearby at the Colombo port — and construction costs were rising as the port began expanding ahead of schedule. The government decreed later that year that ships carrying car imports bound for Colombo port would instead offload their cargo at Hambantota to kick-start business there. Still, only 34 ships berthed at Hambantota in 2012, compared with 3,667 ships at the Colombo port, according to a Finance Ministry annual report.
“When I came to the government, I called the minister of national planning and asked for the justification of Hambantota Port,” Harsha de Silva, the state minister for national policies and economic affairs, said in an interview. “She said, ‘We were asked to do it, so we did it.’ ”
Determined to keep expanding the port, Mr. Rajapaksa went back to the Chinese government in 2012, asking for $757 million.
The Chinese agreed again. But this time, the terms were much steeper.
The first loan, at $307 million, had originally come at a variable rate that usually settled above 1 or 2 percent after the global financial crash in 2008. (For comparison, rates on similar Japanese loans for infrastructure projects run below half a percent.)
But to secure fresh funding, that initial loan was renegotiated to a much higher 6.3 percent fixed rate. Mr. Rajapaksa acquiesced.
The rising debt and project costs, even as the port was struggling, handed Sri Lanka’s political opposition a powerful issue, and it campaigned heavily on suspicions about China. Mr. Rajapaksa lost the election.
The incoming government, led by President Maithripala Sirisena, came to office with a mandate to scrutinize Sri Lanka’s financial deals. It also faced a daunting amount of debt: Under Mr. Rajapaksa, the country’s debt had increased threefold, to $44.8 billion when he left office. And for 2015 alone, a $4.68 billion payment was due at year’s end.
Signing It Away
The new government was eager to reorient Sri Lanka toward India, Japan and the West. But officials soon realized that no other country could fill the financial or economic space that China held in Sri Lanka.“We inherited a purposefully run-down economy — the revenues were insufficient to pay the interest charges, let alone capital repayment,” said Ravi Karunanayake, who was finance minister during the new government’s first year in office.
“We did keep taking loans,” he added. “A new government can’t just stop loans. It’s a relay; you need to take them until economic discipline is introduced.”
The Central Bank estimated that Sri Lanka owed China about $3 billion last year. But Nishan de Mel, an economist at Verité Research, said some of the debts were off government books and instead registered as part of individual projects. He estimated that debt owed to China could be as much as $5 billion and was growing every year. In May, Sri Lanka took a new $1 billion loan from China Development Bank to help make its coming debt payment.
Government officials began meeting in 2016 with their Chinese counterparts to strike a deal, hoping to get the port off Sri Lanka’s balance sheet and avoid outright default. But the Chinese demanded that a Chinese company take a dominant equity share in the port in return, Sri Lankan officials say — writing down the debt was not an option China would accept.
When Sri Lanka was given a choice, it was over which state-owned company would take control: either China Harbor or China Merchants Port, according to the final agreement, a copy of which was obtained by The Times, although it was never released publicly in full.
Chinese workers in their dormitory in Colombo.Credit...Adam Dean for The New York Times
China Merchants got the contract, and it immediately pressed for more: Company officials demanded 15,000 acres of land around the port to build an industrial zone, according to two officials with knowledge of the negotiations. The Chinese company argued that the port itself was not worth the $1.1 billion it would pay for its equity — money that would close out Sri Lanka’s debt on the port.
Some government officials bitterly opposed the terms, but there was no leeway, according to officials involved in the negotiations. The new agreement was signed in July 2017, and took effect in December.
The deal left some appearance of Sri Lankan ownership: Among other things, it created a joint company to manage the port’s operations and collect revenue, with 85 percent owned by China Merchants Port and the remaining 15 percent controlled by Sri Lanka’s government.
But lawyers specializing in port acquisitions said Sri Lanka’s small stake meant little, given the leverage that China Merchants Port retained over board personnel and operating decisions.
When the agreement was initially negotiated, it left open whether the port and surrounding land could be used by the Chinese military, which Indian officials asked the Sri Lankan government to explicitly forbid. The final agreement bars foreign countries from using the port for military purposes unless granted permission by the government in Colombo.
That clause is there because Chinese Navy submarines had already come calling to Sri Lanka.
Strategic Concerns
China had a stake in Sri Lanka’s main port as well: China Harbor was building a new terminal there, known at the time as Colombo Port City. Along with that deal came roughly 50 acres of land, solely held by the Chinese company, that Sri Lanka had no sovereignty on.That was dramatically demonstrated toward the end of Mr. Rajapaksa’s term, in 2014. Chinese submarines docked at the harborthe same day that Prime Minister Shinzo Abe of Japan was visiting Colombo, in what was seen across the region as a menacing signal from Beijing.
When the new Sri Lankan government came to office, it sought assurances that the port would never again welcome Chinese submarines — of particular concern because they are difficult to detect and often used for intelligence gathering. But Sri Lankan officials had little real control.
Now, the handover of Hambantota to the Chinese has kept alive concerns about possible military use — particularly as China has continued to militarize island holdings around the South China Sea despite earlier pledges not to.
Sri Lankan officials are quick to point out that the agreement explicitly rules out China’s military use of the site. But others also note that Sri Lanka’s government, still heavily indebted to China, could be pressured to allow it.
And, as Mr. de Silva, the state minister for national policies and economic affairs, put it, “Governments can change.”
Now, he and others are watching carefully as Mr. Rajapaksa, China’s preferred partner in Sri Lanka, has been trying to stage a political comeback. The former president’s new opposition party swept municipal elections in February. Presidential elections are coming up next year, and general elections in 2020.
Although Mr. Rajapaksa is barred from running again because of term limits, his brother, Gotabaya Rajapaksa, the former defense secretary, appears to be readying to take the mantle.
“It will be Mahinda Rajapaksa’s call. If he says it’s one of the brothers, that person will have a very strong claim,” said Ajith Nivard Cabraal, the central bank governor under Mr. Rajapaksa’s government, who still advises the family. “Even if he’s no longer the president, as the Constitution is structured, Mahinda will be the main power base.”
Crimea
JF-Expert Member
- Mar 25, 2014
- 25,874
- 36,030
Alafu ndio utaweka huo wa bandari?
Crimea
JF-Expert Member
- Mar 25, 2014
- 25,874
- 36,030
Sasa hizi hoja zenu kwamba huo mradi una faida kinyume na selikali inavyotwambia mnatoa wapi kama mkataba wenyewe hamna?
- Thread starter
- #345
Umemaliza yote!! Hawa jamaa walioingia hapa na kuanza kumwaga matusi hakuna hata mmoja ambae amesoma angalau part! Lakini kwavile wanaamini kufeli kwa mradi huu kunatokana na JPM, basi wakiona tu, wanaanza mitusi kwa kile wanachoamini wanalinda legacy ya JPM kumbe ni uzuzu tu!!
- Thread starter
- #346
Hakuna hilo sharti!
Sharti linalofanana na hilo ni kutaka kulipwa fidia endapo biashara itaenda ndivyo sivyo lakini sio kutafutiwa eneo lingine!!!
Hili ndio moja ya masuala yanayotakiwa kuangaliwa kwa umakini na watendaji wetu!! Hata hivyo, kwa setup ya mradi ilivyo, sioni ni namna gani mradi unaweza kushindwa kutengeneza biashara ya kutosha!
Biashara inaweza kuwa declared ni ndogo endapo tu mamlaka husika zitashindwa kufuatilia kwa makini kinachoendelea bandarini... ni kama inavyotokea kwenye madini!!
Ukiweka watumishi wa serikali wasio waaminfu, ni hao hao watumishi wetu ndio wana-collude na investors ili ku-declare uzalishaji mdogo tofauti na uhalisia!
- Thread starter
- #347
Kuhujumiwa hapana... Mchina hana uwezo wa kuzuia meli za wengine zisiingie kwenye hizo bandari!! It's strictly business! Kwanza kama ile ya Piraeus Mchina hakuhusika hata kwenye ujenzi wake!
Kilichokuwa kimetokea pale ni kuokota dodo kwenye muarobaini! Kama unakumbuka, kuna wakati Greece ilielekea kufilisika! Wazungu wenzao wakawatosa kuwakopesha, ndipo Mgiriki akageukie kwa Mchina kutaka amkopeshe mpunga wa kutosha, and in exchange, Mchina angepewa 67% ya hisa za Piraeus!!
Hilo linawezekana kabisa, na ndo maana mara kadhaa nimesisitiza issue sio kuwa na uwezo wa kujenga bandari bali uwezo wa kui-utilize hiyo bandari! Mchina kwake inakuwa rahisi ku-utilize kwa sababu ana share kubwa sana ya mizigo inayopita baharini!
Miradi mingi kama sio yote ya China inahusisha pia industrial complexes! Tuchukulie Bagamoyo kwa mfano... endapo ile model inafanikiwa kama ilivyokusudiwa, hata Mchina akiondoka baada ya muda kwisha bado bandari itakuwa na mzigo mkubwa sana wa manufactured goods!
And remember, kwenye hizi industrial complexes wawekezaji wakubwa watakuwa ni Wachina hao hao!! Sasa wakifanya hivyo hawatamkomoa yeyote bali watajikomoa wenyewe! Na sidhani kama Wachina ni wajinga wa kuweza kujikomoa wenyewe!!!
Kodi bhana itakusanywa, usisikilize propaganda kwamba hatutachukua kodi!! Kodi ambayo Mchina huwa anataka kusamehewa ni income tax kwa sababu ndiyo anayotakiwa kulipa yeye!!
Kodi zingine hazilipwi na Mchina bali zinalipwa na watumiaji wa bandar kama mimi na wewe!! Mchina hana sababu ya kuomba kusamehewa kodi ambayo mlipaji sio yeye!!
Na wala haiwezekani kodi ninayolipa mimi na wewe achukue Mchina... hiyo ni mali ya serikali!
Gobole
JF-Expert Member
- Dec 29, 2013
- 1,806
- 4,670
We jamaa heb pumzika utuache tujadili hii mada wenyewe sasa...tangu umeuweka huu uzi upo bze kujibu karibu kila kitu...ume spend the whole day humu ndani.
Unatupa mashaka nguvu na muda ulioiwekeza kwenye huu uzi...
You are all over aisee, ni km mtu alielipwa ashinde siku nzima humu ndani kutetea huu mradi, heb upumzike sasa uwaachie watu wengine nao wadiscuss, au mpo team nzima mnapeana zamu?
KalamuTena
JF-Expert Member
- Jul 7, 2018
- 13,187
- 17,167
Unajua mkuu 'Ame', haya mambo sasa inafaa kuyasemea waziwazi bila kuyaficha.
Tanzania tuna tabia mbaya za kufumbafumba tunaposemea mambo mazito tunayoona raia yanatuumiza. Hatutaki kusema wazi, na kutaja wanaotuumiza, tunabaki tukifumbafumba tu!
Tulikuwa waoga sana na hawa watu waliosemwa kuwa "wasiojulikana"; na kwa hakika watu tuliogopa sana hata kuzungumza.
Sijasikia tena hawa watu wakifanya kazi kama ile ile waliyojulikana kuifanya, kwa nini sasa tusitumie mwanya huo kuwa huru na kusema mambo tunayoona yanawaumiza waTanzania?
Hawa watu wajanjawajanja ni akina nani? Kikwete na genge lake?
Kwa nini tusiseme na yeye asikie, hata kama kusema kwetu hakutamzuia kuendelea na mipango yake ?
ksny
JF-Expert Member
- Mar 30, 2016
- 1,704
- 1,694
Umeandika maneno mengi ambayo hayakusadia kuelewa kujengwa au kutojengwa bandari ya Bagamoyo. Kwanza, hakuna aliyekataa bandari ya Bagamoyo isjengwe. Wananchi pamoja na serkali wanapenda bandari hiyo ijengwe. Ili hiyo bandari kujengwa lazima iwepo pesa. Pesa hiyo inaweza kuwa ya ndani au mkopo. Kwa sasa pesa ya ndani haitoshi kwa sababu inafanya miradi mingine ya kimkakati. Kama itajengwa kwa pesa ya ndani itabidi ingoje kwanza miradi mingine ikamilike.
Pili, lakini pia inaweza ikajengwa kwa mkopo. Hapo kwenye mkopo, ndipo China ilisema itaikopesha TZ. Lakini kama ujuavyo unapotaka kukopa unakopa kwa masharti. Kama hukubaliani na masharti, mwenye pesa hawezi kukupa. Lakini mkopaji pia lazima aangalie kama anayamudu masharti. Kama masharti ni magumu saana, huwezi kukopa. Na hapo ndipo iliyonekana kuwa masharti ya Mchina ni magumu mno. Kuna nchi ziliwahi kukopeshwa kwa mashrarti kama hayo na sasa zinajuta.
Tatu, hapa naona kila mtu analaumu serkali ya sasa na kuisifu serkali iliyopita. Je, nani mwenye kujuwa kama kweli serkali ya Kikwete iliutaka mradi huu, kwa nini hawakuutia sahihi kabla ya kuondoka? Inawezekana Kikwete na serkali yake iliona masharti yaliyotolewa yalikuwa kaa la moto, wakaamuwa kutegea ili serkali ijayo ndiyo ijiingize kichwa kichwa. Haiwezekani kama Kikwete aliutaka mradi huu aondoke bila kuubariki. Bila shaka machale yalimcheza, akauona ngoja aiachie serkali ijayo. Mimi naona hapa hakuna serkali iliyokuwa tayari kuubariki mradi huu kwa masharti waliyopewa. Ndiyo maana hadi leo hata kesho au kesho kutwa, kama Wachina hawatakuwa na masharti rafiki, hakuna atayeuidhinisha, labda CHADEMA ichukuwe madaraka.
Nne na la mwisho ambalo ni dogo, ni kuhusu mtoa mada kujiita mbeba mikoba wa mtafiti, lakini anatudanganya eti yeye ndiye aliandika "literature review" ya utafiti. Unataka tukuelewe kuwa huyo mtafiti wako alitoka Ulaya/USA au popote pale bila proposal. Yeye alikuwa na concept tu, wewe ndiyo ukamuandikia "literature review". Ndugu yangu proposal hutayrishwa na mbobezi mwenyewe. Yeye ndiye anajuwa wabobezi katika tafiti kama zake. Yeye ndiye anajuwa literature review ipi inahitajika na inahusiana vipi na research problem na research question ili hatimaye iweze kutoa majibu kwa hypothesis/hypotheses. Hii habari ya wewe kuandika literature review kwa mtu aliyekuja TZ kufanya utafiti inanipa shaka. Huyu mtu kwanza asingweza kuja TZ bila vyombo husika ku"approve" utafiti wake. Approval lazima itoke kabla hajaondoka kwao. Na kama hiyo proposal ilikuwa haina literature review isingeweza kuwa approved! Hebu tueleze kidogo, methodology ilikuwa tayari, kabla ya literature review! What an anomaly in the research world. Next time, tell something convicting or near it! Do you know what an IRB is?
Hv sisi niwatazamaji wa nje tu mara mmarekani mara Mchina...tushafanya majaribio ya uwekezaji wa nje tumeona kabisa matokeo yake wanakusanya vya kwao wanasepa wakiona mradi hauna tija kwao...matarajio yetu ni makubwa kuliko wanachoweza kutupa na wao wako kibiashara..,
Tujikite kuendeleza Mungu alichotuzawadia, tukimultiply kwa nguvu zetu wenyewe no matter how slow...na mwenyezi Mungu atatufungulia njia...mpaka leo kilimo chetu ni cha mkono bado focus ni nje, tutagawa vipande mpaka tukose pakukanyagia.
Tujikite kuendeleza Mungu alichotuzawadia, tukimultiply kwa nguvu zetu wenyewe no matter how slow...na mwenyezi Mungu atatufungulia njia...mpaka leo kilimo chetu ni cha mkono bado focus ni nje, tutagawa vipande mpaka tukose pakukanyagia.
MALCOM LUMUMBA
JF-Expert Member
- Jul 26, 2012
- 21,113
- 65,124
Braza, mimi hapa ntarudi kesho ili tuliweke sawa hili jambo.....
Umenisemea pia mkuu, ubarikiwe sana
Wakati 'ule kimya', wakati 'huu papapapa'
F9T
JF-Expert Member
- Dec 26, 2015
- 2,677
- 4,959
Huo mkataba upelekwe bungeni ujadiliwe na wabunge wetu akina musukuma, babu tale . kibajaji, jah people. Na wengine kibao
F9T
JF-Expert Member
- Dec 26, 2015
- 2,677
- 4,959
Shida sio kujengwa au kununua ndege, shida ni je imejengwaje? Au ndege zimenunuliwaje?
F9T
JF-Expert Member
- Dec 26, 2015
- 2,677
- 4,959
Mimi tangu siku ile kasim majaliwa aseme uongo msikitini kuhusu hari ya jpm. Sina hamu nao.
F9T
JF-Expert Member
- Dec 26, 2015
- 2,677
- 4,959
Naongezea hapo Mkuu. Hata jpm na yeye ni wakupuuzwa kwa maana aliukataa mkataba bila ya kutuoesha na sisi tuusome .