Hambantota Port takes off?

Description: Inline image 2From Daily Mirror Item dec 2014

I. “Thoughts” – by Michael Roberts

This is actually from an old news item in the Daily Mirror in late 2014 –perhaps one that was buried in the course of election fever during the Presidential contest. There is an ironic twist here: the astrological wisdom that led His Lordship, Mahinda Rajapaksa, to call an early election stands in contrast with the unknown functionaries and Presidential diktat (guided in part by his cultivation of his own patch –a “wrong reason”) that saw one of the world’s unique inland harbours being built at Hambantota.


I did not have the economic  figures and the details of the loan arrangements with China. But subject to that proviso it struck me that the mountain-loads of sea traffic passing south of Hambantota both ways made this proposition a long-term winner. By “long term” I understood at least twenty years. For me, then in 2011 when I happened to visit the area during the course of the World Cup, there was an additonal reason to favour the project: it would patrtially and incompletely counterbalance the lopsided spatial economy of the island, namely, the heavy concentration of peoples and development in the Colombo locality.

The latter finding was one product of my historical researches on the rise of the middle class in Briitsh Ceylon, as depicted in chapter seven in Roberts, Raheem and Colin-Thome: People Inbeteeen (Ratmalana: Sarvodaya, 1989). The analysis therein, and my thinking, was/is directed by readings  of the economy in spatial terms: hence the stress on imbalance.  So, check out the striking aerial picture produced by theWorld Bank and pictured again by Rohan Gunasekera in an item I have re-labelled “A Starry Guide to Ribbon Development.” In one new-fangled strike he reveals my argument. Add that one of the maps –that of internal migration patterns within the island leading up to 1971– which I deployed in People Inbetween, courtesy of meticulous work from two of my Geography colleagues.

Guided by this information and analytical understanding, in 2009 I had presented this contention: “the Hambantota locality will soon develop a capacity to function as a growth pole and a counterpoint to Colombo’s dominance. This probability will be of immense benefit to Sri Lanka’s political economy.” A growth pole. That theoretical construct was at the centre of my thinking. It is at once an economic tool and a geographical concept, something derived by interaction with geography personnel and economics personnel at Peradeniya University way back in time and fostered further in debates at the Ceylon Studies Seminar at the same institution.

That article was entitled “The Rajapaksa Regime: Brickbats, Plaudits,” and was placed in Groundviews (so that readers should hasten there to see the lashings I received). I also received a private caning from one of my dearest friends, a Peradeniya product and an internationalist of note, who indicated, albeit in more polite words, that I was bumsucking.  I did not respond as far as I recall. But, in the process, he revealed his miserable failure to comprehend the concept of “growth pole” and the spatial perpective that guided my reasoning. One could perhaps conclude that service in the international bureaucracy occludes  spatial conceptualization

I will re-present that essay  again here in Thuppahi in afew days, but let me clarify my thinking by noting other aspects that featured as sub-sections in “Brickbats, Plaudits.” For one there was a sub-section where I urged the government of Sri Lanka, viz., the Rajapaksas then, to “proceed to develop the North-East as a third growth pole, with the axis constituted by Point Pedro-Trincomalee-Jaffna town as the central trunk and Kankesanturai, Palaly and Velvittatturai as adjunct limbs.” Another sub-section launched the article with the sub-title “A Terrible Record” and pointed to the “series of killings and intimidations” that had been  taking place and criticised the consolidation in the Rajapaksa period of “the long tradition of overcentralised decision-making and authoritarianism at the top that has been a feature of Sri Lanka’s so-called democratic institutions for many decades.” Enough for the moment on those caveats. It is the directions and content of growth that we must consider here.

In a private aside Gerald Peiris had some questions re some of the wasteful projects in Hambantota. Though I had some hopes re the prospects associated with Mattala airport in the long term, there certainly are serious questions about its economic viability. The Sooiriyawewa Cricket Stadium (where I witnessed its first matches during the 2011 World Cup) brought some immediate return in providing a crucial third pillar enabling Sri Lanka Cricket to snaffle the Champions League in 2013. However, its economics in cost and maintenance have also to be balanced by a study of its returns up to now and over the further returns in the next ten years. That it is a boost to cricket in the Matara, Hambantota and Monaragala Districts I have no doubt, while the people in the Ratnapura to Sooriyawewa belt also profit from the sporadic increase in traffic.

Note this however. Cricket in Lanka is a potential political unifier. We cannot measure the pleasure it brings to patriotic (and not-so-patriotic) viewers in the eastern and southeastern localities who now receive the opportunity to watch international teams, from the top layer to Pakistan Under 19. This possibility was slim in the previous decades unless one was very rich or well-connected and could travel to Kandy or Colombo or Galle. Renton de Alwis’s cook presented an unsolicited remark in awe as we sat together watching Sri Lanka play Canada at Sooriyawewa. Here he was watching a match in electrifying atmosphere — somethng he never had experienced before and had not expected in his lifetime.

It would be helpful if some analysts (A) study the loan arrangements, costs and returns of Hambantota Port in detail and (B) list the news items and literature on the topic over the last ten years as a precursor to a review of these items. If my memory serves me correct, there were some news items and weighty pronouncements from ‘credentialed persons’ that rubbished the project. Some of the critical items, ha-ha, were around the time of the Presidential Election. As Peter Sellars would say: “What’s New Pussycat!”

Hamban Hamba n 22


Percy to the foreat Sooriyawewa Stadium during Canada vs Lanka, 2011


… amidst split loyalties

II. Daily Mirror: Hambantota Port Records Rs.5.4bn Revenue In 2014,” 29 December 2014, http://www.dailymirror.lk/59873/hambantota-port-records-rs-5-4bn-revenue-in-2014

The Chinese-funded Magam Ruhunupura Mahinda Rajapaksa Port (MRMRP) in Hambantota has recorded revenue of Rs.5.39 billion for the year 2014, compared to Rs.585.2 million in 2013, statistics released by Sri Lanka Ports Authority showed (SLPA). The bulk of the revenue— Rs.4.26 billion— has come from bunkering operations that began June this year, with a US $ 76.5 million bunkering terminal.

The port received 134 vessels calling for bunkers up to December for a total volume of 53,487 metric tonnes.According to the SLPA, replenishment of stocks are ongoing with major suppliers getting actively involved in the supply chain ensuring timely supplies and quality of the products. “MRMRP is fast becoming a major stopover for vessels to stem bunkers with its brand new tank farm and terminal complex in full operation. The main customers are the very large bulk carriers and Crude Oil tankers which are plying the busy sea lanes in the region,” SLPA said in a statement. The tank farm with 8 tanks for fuel bunkering facilities for vessels, 3 tanks for aero fuel and 3 tanks for storing LP gas can initially handle 55,000 tonnes of shipping fuel and is expected to add another 100,000 tonnes under the second phase.

Meanwhile, revenue from vehicle handling for the year 2014 stood at Rs.1.12 billion. The port handled 254 vessels carrying vehicles (Ro-Ro vessels) against 137 Ro-Ro vessels in 2013. The total number of motor vehicles handled this year was 188,791 against 64,524 units in 2013, SLPA said. As a measure to ease the long berthing delays experienced by Ro-Ro vessels in Colombo, SLPA has been routing such vessels to MRMRP from June, 2012.Meanwhile, MRMRP has handled 37,631 domestic and 151,160 transshipment units in RO-RO operations this year, against last year’s 25, 875 and 38, 649 units, respectively. SLPA said, 70 percent of the second phase of MRMRP has been completed by now and will be ready for operations during the final quarter of 2015. The phase one of MRMRP is estimated to cost US $ 361 million, excluding bunkering terminal, while phase two is priced at an estimated US $ 808 million.

The ‘Agreement on Key Terms for Supply, Operate and Transfer (SOT) of Container Terminal Hambantota Port Development Project Phase II’ was entered into this September in the presence of President Mahinda Rajapaksa and his Chinese counterpart Xi Jinping. Dr Wickrama signed on behalf of Sri Lanka. Signing for China were representatives of China Merchants Holdings International (CMHI) and China Communication Construction Company Ltd. (CCCC). The former already operates the new Colombo International Container Terminal (CICT) and the latter is building the 233-hectare Colombo Port City.

The partners in the Hambantota SOT will be CMHI and China Harbour Engineering Company Ltd, an engineering contractor and subsidiary of CCCC. According to a filing made by CMHI to the Hong Kong Stock Exchange, it will hold 64.98 percent of the project company while SLPA will have the remaining 35.02 percent .“The concession period to be granted to the project company under the SOT agreement shall initially be 35 years from the commencement of operation of the SOT project, which can be extended by five years at the option of the project company,” CMHI said in the filing.

See more at: http://www.dailymirror.lk/59873/hambantota-port-records-rs-5-4bn-revenue-in-2014#sthash.srTYXuRi.0wrIYdWF.dpuf


SL looks to China to buoy H’tota port …

Sri Lanka’s new leaders are banking on Chinese investments to revive the Hambantota port project.Hambantota gained notoriety as a port without ships and was the butt of opposition criticism of then Sri Lankan President Mahinda Rajapaksa. Following Rajapaksa’s ouster in January’s presidential election, the new government first toyed with the idea of turning the port into a ship-breaking yard, before deciding to make it a dockyar


“We have US$ 1.5 billion sunk in the project and no revenue. We need to make use of it. We want Chinese investors to come and help turn it into a dockyard as well as invest in an industrial park there,” Deputy Foreign Affairs Minister, Dr. Harsha de Silva told the South China Morning Post in an exclusive interview. “The Chinese have expressed interest in the project.

Hopefully things will start moving after Colombo Port City is sorted,” he said.

The Sri Lankan Cabinet has approved a plan by China HarbourEngineering Company (CHEC) to do a feasibility study to build the dockyard at Hambantota. CHEC has also proposed to manage and operate the dockyard. Hambantota is among the many big-ticket infrastructure projects China funded during Rajapaksa’s rule.

Sri Lanka is estimated to have received up to US$5 billion from China in the form of aid, softloans and grants in the past six years. Nearly 70 per cent of the infrastructure projects in the country have been funded by China and built by Chinese companies.

(South China Morning Post) 

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