The Hambantota Port[3] (also known as the Magampura Mahinda Rajapaksa Port) was to be a maritime port in Hambantota, Sri Lanka. The first phase of the port was opened on 18 November 2010, with the first ceremonial berthing of the naval ship "Jetliner" to use the port facilities. It is named after former President Mahinda Rajapaksa.[4][5] Hambantota Port is built inland and operated by the Sri Lanka Ports Authority.[6] The total estimated construction cost of the Phase 1 of the project is US$361 million, out of which 85% was funded by the EXIM Bank of the People's Republic of China.[7]
| Statistics | |
|---|---|
| Details | |
| Location | |
| Port of Hambantota | |
 The port in 2013 | |
 Wikimedia | © OpenStreetMap | |
| Country | Sri Lanka |
| Location | Hambantota |
| Coordinates | 06°07′10″N 81°06′29″E |
| UN/LOCODE | LKHBA[1] |
| Opened | 18 November 2010 |
| Operated by | China Merchants Port |
| Available berths | 3 |
| Draft depth | 17.0 m.[2] |
| IATA | HBT |
| Website www.slpa.lk |
However, the Hambantota Port in 2016 made a revenue of US$11.81 million and incurred expenses of US$10 million as direct and administrative costs to report an operating profit of just US$1.81 million.[10]
As the port incurred heavy losses, making debt repayment difficult, in 2016 the newly-elected government decided to privatize a 80% stake of the port in order to raise foreign exchange.[11] Of the two bidding companies, China Merchants Ports holding company (CMPort) was chosen,[11] paying a total of US$1.12 billion to revive the port under a public–private partnership.[12][13][14] Later, it was decided that under the agreement, CMPort will divest 20% of its shares to a Sri Lankan company within ten years. CMPort will have to spend at least US$700–800 million or more to bring the port to operational level.[15] In July 2017, the agreement was signed, but leasing only 70% of the Port to CMPort instead of the initially proposed 80%.[16]
In July 2018, it was announced that Sri Lanka would relocate its naval base at Galle to Hambantota.[17]
BackgroundEdit
The inland harbour on the Walawe river and the sea harbour on the bay of Godavaya in Ambalantota Trade were an important component in the economy of ancient Sri Lanka, and Godavaya was an important maritime settlement, serving Tissamaharama and Ridiyagama in the kingdom of Ruhuna. This port was first known to be operational in the general area of Hambantota around 250 BCE, when Chinese and Arabian merchants used it as part of the maritime silk route.[9] Around the 1st century CE, a furnace powered by monsoon winds was built near Embilipitiya, which used wind-based air supply to produce high carbon steel. This steel was exported to Rome and other European areas for the manufacture of armor and swords, with ships sailing to a port in Hambantota to obtain steel.[9]
Hambantota is located along the southern coast of Sri Lanka, six miles away from east-west shipping routes
Hambantota Port
In 2002 Sri Lankan Prime Minister Ranil Wickremesinghe unveiled the "Regaining Sri Lanka" programme, which identified the Hambantota Seaport for development. The proposals for the port area include a refinery, petrochemical related industries, a coal powered thermal power station, and a desalination plant.[18][19][20][21] The project did not proceed because it was deemed unfeasible.[22]
The port is part of the 21st Century Maritime Silk Road that runs from the Chinese coast via the Suez Canal to the Mediterranean, there to the Upper Adriatic region of Trieste with its rail connections to Central and Eastern Europe.[23][24][25][26]
Construction and openingEdit
Construction started on 15 January 2008, the Hambantota Port and was constructed by the Chinese companies China Harbour Engineering Company and Sinohydro Corporation.[9] The total cost of the first phase of the project is estimated at $360 million, excluding $76.5 million for the bunker terminal.[27] 85% of the funding was provided by the Chinese Government and the remaining 15% by the Sri Lanka Ports Authority.Initially set to open in the first half of 2011, five months ahead of schedule,[28] the first phase of the project was completed by November 2010.
The harbor was formally declared open on 18 November 2010, by Sri Lanka's president Mahinda Rajapaksa with a ceremonial berthing of a vessel at the port. After sailing 90 nautical miles from the Naval Base in Galle, Sri Lanka Navy's ship "Jetliner" was the first vessel to drop anchor at the harbor.[29] Two vessels, Pradeepa 2 (a traditional sailing yacht) [30] and a commercial cargo ship followed the jetliner ceremonially sailing into the new harbour. Pradeepa 2 was chosen in recognition of Sri Lanka's age old role as a key stopping point on the ancient east-west silk trading route. Workers unloaded the first consignment of international cargo from Myanmar from the vessel "Seruwila" at the auspicious time of 06:21 GMT. A first day cover and a special commemorative stamp were issued by the Department of Post - Sri Lanka to mark the event. The launch of the second phase of the development of the port commenced at 06:27 GMT on the same day. There is also a move to create this port as a free port due to its commercial inactivity.[31]
However the Rajapaksa government turned down many proposals such as floating dock by China harbour Coroporation with a local investor, a proposal by a middle eastern firm to operate oil storage and bunkering was turned down due to influence from a young minister who wanted to make profit by keeping the activities under their control. Proposals for bottling factories, sugar bagging plants and grain processing plants were also refused.[32]
The port made losses of Rs.18.8 Billion resulting the debt payment burden falling on tax payers. After the fall of Rajapaksa government Prime Minister Ranil wickremesinghe visited China to solve the issue. As a result, Sri Lanka entered into a PPP agreement with China Merchants Port company to revitalize the Port alongside the creation of a large Special Economic Zone of 15,000 acres[33][12][13][34] However the plans including the Special Economic Zone received heavy opposition from Rajapaksa who threatened with social unrest.[35]
Hambantota Port Tower
Under HIPGEdit
Under the Hambantota International Port Group (HIPG) which was formed as a joined venture between CMPort and the Sri Lanka Ports Authority the Hambantota Port made a turn around from its previous "White Elephant" status. The HIPG introduced automation, represented the port in several international summits and signed agreements with international shipping companies. As a result the 9-storey administration building of the port, the Hambantota Maritime Centre became 95 percent occupied and in just one year under the new management the port made a 136% increase in the volume of ro-ro vessels handled and even diversified its services to include other port-related activities such as container handling, general cargo, passenger, bunkering, bulk terminal, gas and project cargo.[36][37]Sri Lanka is situated along the key shipping route between the Malacca Straits and the Suez Canal, which links Asia and Europe. An estimated 36,000 ships, including 4,500 oil tankers, use the route annually.[9][38] However the only major port in Sri Lanka, the Port of Colombo, is catered towards container handling and is unable to provide facilities for port related industries and services.[39] Therefore, a new port was proposed near the city of Hambantota, which has a natural harbor and is located on the southern tip of Sri Lanka close to international shipping routes.[27]
A new port will help relieve pressure on the Colombo port, and also provide services to ships that normally take three-and-a-half-day detours from their shipping lanes to receive these services, including refueling, maintenance, logistics and buying provisions and medical supplies.[9][40] Proposals to build a port in Hambantota date back over three decades, but plans never got out of conceptual stages.[9] The Port of Hambantota project was finally launched after Mahinda Rajapaksa, who is a native of Hambantota, was elected President of Sri Lanka in 2005.[9] A leading maritime expert, Nuwan Peiris,[41][42] commented that this port is a conflict between "...the intervention of two Asian superpowers in Sri Lanka, namely China and India, in a bid to gain supremacy in the case of the former, and a proxy-battle to maintain its natural defense-perimeter in the case of latter. Chinese involvement in a harbour project (Hambantota) in the down-south of the island has given this battle a renewed intensity."[41
The first phase of the Port of Hambantota will consist of two 600m general purpose berths, a 310m bunkering berth and a 120m small craft berth.[6][43] It will also contain a bunkering facility and tank farm which will include 8 tanks for marine fuel, 3 tanks containing aviation fuel and 3 for Liquid Petroleum Gas (LPG). A 15 floor administrative complex will also be constructed as part of the project.[9] In 2020 Sinopec's Sri Lankan unit invested in bunkering and invested in a $5m in a tanker which flies the Sri Lankan flag. Lanka Marine Services (LMS) partnered with Sinopec in supplying very low sulphur fuel oil (VLSFO).[44]
The mouth of the natural harbor at Hambantota has a 22-metre depth. When completed, the port will have a 1.5 km long breakwater, with a minimum basin depth of 17 m. This is compared to the 15.5 m depth of the Port of Colombo. The turning circle will be 600 m.[9] A dam will also be built to prevent flooding in nearby areas, and a seawall made of interlocking concrete blocks will protect the port from high seas.[40]
A $550 million tax-free port zone was set up outside the port.[38] In 2016 a 15,000 acre SEZ project was announced with 5,000 acres from Hambantota and the rest from Monaragala, Ambilipitiya and Matara.[45]
The finished project is expected to provide indirect employment to over 50,000 people.[9]
In July 2019 LAUGFS Holdings opened a Liquid Petroleum Gas (LPG) terminal which import butane and propane and produce LPG to sell domestically or re-export. Within the first 14 months it had handled 413,000 metric tonnes of LPG, 60% of which was exported to Bangladesh, Maldives and India. As of September the terminal handles around 15 – 20 ship calls per month and it is expected to increase up to 30.[46]
The second phase of the Port of Hambantota project, which will include a container terminal, is expected to be completed by 2014. The second stage of the port is estimated to cost around US$750 million.[47] The third phase will include a dockyard.[38] Upon completion, the port will cover 4,000 acres (16 km2) of land and accommodate 33 vessels at any given time, making it the largest port in South Asia.[9]
Port operationsEdit
The SLPA had decided to divert all vehicle shipments to the Ruhunu Magampura Mahinda Rajapaksa International port from May 31, 2012 as a measure to relieve the congestion at Sri Lanka's main port Colombo Harbour. On June 6, 2012, Ruhunu Magampura Mahinda Rajapaksa International Port officially started transshipment operations with the N4K FRICIA ship from Japan containing 15 vehicles and the Ellison Sun with 1000 vehicles from Chennai Harbour, India.[48][49]Japanese, South Korean and Indian car makers have begun transshipping increasing numbers of vehicles through the port. In the first nine months of 2014, the number of vehicles handled at Hambantota crossed the 100,000 mark, up more than 300% compared to the same period in 2013, with the number of ship calls more than doubling to 161. The biggest user of the port is the Hyundai plant near Chennai while Tata and Maruti vehicles also come from Mumbai. In future, all Hyundai vehicles made in South Korea, China and India will be transshipped through Hambantota 15,000 units a month once more yard space is available.[50]
In April 2017, making a historic landmark in Sri Lanka, the world's largest pure car and truck carrier (PCTC), the MV Hoegh Trigger, arrived on her maiden call at the Port of Hambantota.[51]
In December 2016, a mob of workers who were believed to be backed by Rajapaksa loyalists protesting against the leasing of the port vandalised the port and took several ships hostage. The 13-storey building which was taken over by the strikers was flooded, and CCTV systems and electricity shut down. However swift action by Navy rescued the ships and began repairing damaged infrastructure thus reducing the damage and the government accused leaders of the strike well as a protest against the SEZ that happened in Hambantota led by members of the Nil Balakaya, an organization created by Namal Rajapaksa and the government accused them of being political appointees.[52][53] As a result, a shipping line also sent a bill of $400000 as damages to the ports authority.[54][55] However the government and Navy Commander Vice Admiral Ravindra Wijegunaratne has come under extreme criticism from Civil activists and media movements over an assault on a journalist during this protest in Hambantota port. [56][57]
On July 28, 2017, Prime Minister Ranil Wickramasinghe announced that lease would be signed the next day[58] 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. The deal gave the Sri Lankan government $1.4 billion, that were used to strengthen US dollar reserves and pay short-term foreign debts unrelated to the port.[59][11] The deal had been delayed by several months over concerns that the port could be used for military purposes and as well as huge opposition to the deal from trade unions and opposition political parties who called it a sellout of the country's national assets to China.[60][61] 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 disputed[59][62][63] accusations that China was practicing debt-trap diplomacy.[64][65]
