The Benefits from the Hambantota Port Project: Mathews faces Perera Head-On

An Email Memo from Gus Mathews addressing His Schoolmate Prithi Perera,[1] 22 September 2021 … with highlighting and End Notes being impositions of The Editor, Thuppahi

Prithi, we will not concur on this debate about Hambantota and I wish to conclude this discussion. But before I go let me take you up on India being a friendly country to Sri Lanka. While Sri Lanka wants a friendly relationship with India, it does not want to be a vassal state of India.

Recent events have proved that India is not to be trusted. India trained, armed and let loose the LTTE in Sri Lanka to murder 100,000 Sri Lankan civilians. Many Presidents could not defeat the LTTE and one Sri Lankan President paid the ultimate price. The LTTE became powerful and even defeated the IPKF. Unfortunately, India will never learn that interference in Sri Lanka is detrimental to India too – my case in point is the assassination of Rajiv Gandhi by the LTTE.[2] Finally, it was left to Mahinda Rajapakse who gave the political will[3] and Gotabhaya Rajapakse who banged the heads of the Service Chiefs to strategise the ultimate demise of the LTTE.

You just have to look at the geo-politics of the region where India has very poor international relations with all its neighbours like Myanmar, Bangladesh, Pakistan and China. Sri Lanka is no exception where India interferes into the internal politics of Sri Lanka. Unfortunately, the UNP pays obeisance to India. This is demonstrated by Ranil Wickremasinghe who on winning the 2015 election invited Narendra Modi to address the Sri Lankan parliament – there was no such reciprocity from Narendra Modi to Ranil Wickremasinghe. In my opinion this is a diplomatic insult to Sri Lanka.

Colombo port, though periodically upgraded, is still an old port and the upgrades have their limitations while Hambantota is a brand-new port with modern state of the art infrastructure. 

You and I will never agree that the debt to China is only fifteen percent of Sri Lanka’s total debt at two percent interest and debts to Western banks is eighty five percent at six to seven percent interest. This is despite Dr. Nishan De Mel laying out the facts in the video I sent you. Also you will never accept that the leasing of Hambantota to Merchants Ports limited was to pay the maturing sovereign bonds to Western banks and not as a quid-pro-quo to settle Chinese debts. You can go on believing the American propaganda about Chinese debt trap, Personally I do not.

The wealth of a country does not determine economic principles as borrowing is justifiable if there is economic growth and the ultimate determinant of any borrowing is economic activity. Any loss of economic activity is detrimental to growth and the recent Covid debacle proves beyond doubt about the stymied growth in Western countries due to the loss of economic activity.

I know that you have a hatred of the Rajapakses for political and personal reasons and anything they do to bring Sri Lanka into the twenty-first century is anathema for you. The Rajapakses like many politicians in various political parties are prone to corruption and this has been ongoing since Independence. 

The ‘coup’ that you are fond of mentioning is the result of Ranil Wickremasinghe who could never win the Presidential election and utilised a ‘patsy’ like Maithripala Sirisena and changed the constitution to give himself near Presidential powers, until the ‘worm’ turned and threw the whole GoSL into chaos with lax security where two hundred and fifty four innocent civilians paid for with their lives.[4] Is it any surprise that in the following election the UNP lost all its seats and threw Ranil Wickremasinghe into the political wilderness?

Finally in conclusion I give below a host of emails in support of Hambantota by those who have worked closely with the project.

Subject: Re: Fw: Hambantota Port

The Hambanthota port is a viable concern and will definitely pick up with
time. The idea to develop the port was there for a long time but due to
decisions taken by Colombo based politicians and business crowd it was
started late
During my time in the port we were under pressure to close the project and
say it is not viable, but we managed to carry out the feasibility studies
without publicity

On Sun, 19 Sep 2021 14:21:09 +0000
Subject: FW: economy and pub culture
Hambantota Port inks deals with more than 30 countries
September 15, 2021
The Hambantota Port has signed deals with more than 30 countries as
it looks to promote its operations globally. Hambantota International Port Group (HIPG) said

that the promotional activities have garnered commendable results despite the gloomy

market situation experienced globally.

“We are rapidly moving to diversify HIP’s industrial zone portfolio and at
the same time we are widely promoting the location internationally. We have
signed with more than 30 investors from across the globe i. e. UK, Singapore, Japan, Sri Lanka, 

China and now the Maldives,” Johnson Liu, CEO of HIPG said.

The new operational blueprint of the Hambantota International Port >s impacting all aspects of the port’s activities. “HIP Speed” is a concept to increase efficiency and momentum across port operations for the>benefit of all stakeholders, HIPG said in a statement today.

“HIP Speed will bring a new dimension to investment in port operations and
allied industries. We put this formula in place taking into consideration
the opportunities that will emerge in the coming year, when supply and
demand structures will change and trade routes will be reinvented.
The Hambantota Port is well placed on the global maritime map for growth
and investment, and this formula is to strengthen processes and
infrastructure to capitalize on future opportunities. As per our overall plans HIP
will be a port that will complement the services of other ports operating in
Sri Lanka,” Johnson Liu said.
HIP Speed is modeled on previous hands-on experience of the current CEO on
other facilities managed by the CMPort, ensuring efficiency and
momentum of projects that would otherwise have dragged their feet in planning
and execution.

The concept also extends to customers establishing their operations in the
port’s industrial zone; so that they receive optimum support speed
in clearing any bottlenecks. HIPG is also working on establishing
branch offices of leading investor companies, shipping and logistics
gents, and has leased out 7 floors of the Maritime Centre to more than 30interested
parties. The One Stop Service (OSS) facility with representative
offices from BOI and Customs have made the whole investment process more efficient,
the same facility will be available from the Ministry of Industries
in the near future. The aim of this effort is to minimize the burden on investors when obtaining required certification and approvals from government institutions.

Tissa Wickramasinghe, Chief Operating Officer of HIPG says, “The first two years of our operations was dedicated to setting up the processes, which included drawing up the master plan and putting in place a Standard Operating Procedure (SOP). This was vital as when launching a project such as this we need to get everything right the first time over. While we looked at overseas models for benchmarking and maximizing our operational efficiency, we were guided mainly by the global standards andprocedures of CMPort, which operates more than 50 ports and terminals all over the world. In the first half of 2021, CMPort achieved double-digit growth on its container throughput and bulk cargo volume at home and abroad. The Group’s ports handled a total container throughput of 66.57 million TEUs, upby 21.3% compared with the corresponding period last year, and bulk cargo volume of 284 million tonnes, up by 42.8% over the same period ofthe previous year.”

Their partnership with the Shenzhen Xinji Group to set up a plug and play ‘Park in park’ manufacturing facility within the industrial zone isan example of how HIP Speed operates. The project went into construction within 20 days of signing the partnership agreement with HIPG. Likewise, several projects have reached the construction stage, like the Ceylon Tire Manufacturing facility, which is nearing completion of leveling and clearing work.

A state-of-the-art yacht building facility is also to be set up at the port by Sea Horse Yachts (Pvt) Ltd. HIPG recently entered into an
agreement with the newly incorporated company, a premium luxury yacht builder which is privately owned by boating enthusiasts from Maldives. The initial investment for the facility, which will be located within the Hambantota International Port, is set at approximately USD 58 million (Sri Lankan Rupees 11.5 billion) and production is set to commence by early 2022.

The vision of HIPG is to develop the Hambantota International Port to become an energy hub for South Asia. In order to build this energy hub, HIPG
entered into a strategic partnership with Sinopec Fuel Oil Lanka Limited (SFOL) to provide bunkering services as a wholesale exporter and
also service vessels calling HIP as a value added service. Bunkering is an important part of HIP’s energy services portfolio. Sinopec with their vast
resources guarantees the supply of VLSFO in Hambantota currently and MGO in the near future, enabling the port to service all vessels plying the principal sea route in the Indian Ocean.

Transshipment of LPG and delivery for local consumption is also a part of the energy hub mix at HIP, which has the two main players operating supply
facilities within the port. HIP has also partnered with Intertek Lanka (Pvt) Ltd to establish a state-of-the-art petroleum testing laboratory,
within the port to provide services to the energy hub, further strengthening HIP capacity to provide these services.

Not only is HIP investing in the efficiency of port operations, they are also helping the surrounding community deal with the pandemic in a
timely manner.  HIPG has provided funding to establish a fully-fledged PCR testing laboratory at the Hambantota District General Hospital. Part of the
funding for the PCR testing facility comes from the China Merchants Foundation (CMF), the philanthropic arm of HIPG’s main shareholder, CMPort.
Many donations of personal protection equipment have also been made to government institutions in Hambantota.

In addition to bringing in new foreign investment, HIPG is increasing its own investment footprint at Hambantota Port, as well as creating more employment opportunities for locals and promoting the development of localindustries. The group will continue to promote the portand the Hambantota district, with a view to turning it into a new Maritime center, which in
turn will have the desired impact on the Sri Lankan economy as a whole. ……………(Colombo Gazette)


Subject: economy


The 2Q 2021 GDP data published by the Department of Census and>Statistics indicates a 12.3pct increase in the revenue of the country compared to the same period 2020.

The corporate earnings too validates this 2Q 2021 surge in economic activity with many retail stores,

FMCG firms, export companies, banks, telecos, and many listed companies too confirming this growth in their respective balance sheets and income statements. Due   the countercyclical fiscal and monetary policies adopted in order to stimulate economic activity. We must be mindful of the fact that these results come on the back of many challenges.

It indicates our ability as a nation to ‘stand up’ and claim our stake in the face of setbacks and negativity thrown by external rating agencies, and our own doomsday economists who are desperate to stop this country from progressing with its ‘production economic model’.




Mathews, Gus 2019 “Security and Governance Failures Everywhere: A Concise Review,” 25 April 2019,

New York Times 2019Security Failures and Security Implications from the Jihadist Terror in Sri Lanka, Easter Sunday 2019,” 23 April 2019,

Roberts, Michael 1994b “The Asokan Persona as a Cultural Disposition,” in Roberts, Exploring Confrontation, Reading: Harwood Academic Publishers, pp. 57-72.

Roberts, Michael 1994c, “The Asokan Persona and its Reproduction in Modern Times,” in Roberts, Exploring Confrontation, Reading: Harwood Academic Publishers, pp. 73-88.

Roberts, Michael 1994d “Four Twentieth Century Texts and the Asokan Persona,” in Roberts, Exploring Confrontation, Reading: Harwood Academic Publishers, pp. 57-72.


[1] It seems that Gus Mathews and Preethi Perera were batchmates at St Joseph’s College in Colombo together. The measured tone of disagreement in Mathews’ letter is quite admirable in my view. I have not met him personally and only developed email exchanges after the tragic act of euthanasia by Rajeewa Jayaweera a few years back. I stress, here, that he has no connection whatsoever with the Wahumpura Sinhala clan of Cyril Mathew (ardent Sinhala Buddhist defenders of the faith) and can be presented as “liquorice all sorts” in ethnic terms – a fellow Thuppahi in other words. He resides now in London.

[2] For this event, see DR Kaarthikeyen, The Rajiv Gandhi Assassination. The Investigation, 2008 and Michael Roberts, “Killing Rajiv Gandhi: Dhanu’s Metamorphosis in Death?” South Asian History and Culture, 2010, Vol 1, No. 1, pp. 25-41.

[3] To indicate that neither myself nor Gus are acolytes of the Rajapaksa lineage take note of three items on “the Asokan Persona” presented in the bibliography.

[4] The reference here is to the Easter Sunday massacres of the year 2019 carried out by ISIS inspired local Muslim zealots who profited from the lax security of sycophant officers of state appointed by Sirisena and Wickremasinghe. See Gus Mathews, “Security and Governance Failures Everywhere: A Concise Review…, 25 April 2019, ………………. …………… …………. AND New York Times,

Security Failures and Security Implications from the Jihadist Terror in Sri Lanka, Easter Sunday 2019,” 23 April 2019,



A RESPONSE from PRITHI PERERA, 23 September 2021

Gus, OMG ! Here we go again !!
You have the uncanny ability of moving from one topic  to another and in the process, bringing in past issues that have been already discussed and worn out. I do not know if others are interested in listening to old records, but, nevertheless, I would like to point out that in this instance you have moved from Hambantota  to India, to the famous  war hero credit claims and to quotes from paid employees who have worked on the Hambantota project. An array of issues to respond to.
As to India not being trusted, i have never disputed that, nor would most Lankans, learning from the past experiences, but, what i do say is that we do and must  maintain friendly relations, diplomatic and person to person and whilst i would also say,  they are as distrusted as any other big power would be, particularly in their  neighborhoods, as is the case of China (East Asia’s), India (South Asia) and US (Latin America’s) to name a few. And you did not miss a chance to claim war victory for your heroes, one who was away for a major part of the 30 year war and another, who was still in government, including as a Prime Minister and then as President during the 30 year war period and when the war was finally ended to say it was  by banging the heads of the Service Chiefs who were experienced warriors, who led the battle from the front on the ground. However, what you forgot  to say was  that these same warriors were there before, but, it was mother time that was opportune when the LTTE were on the decline, both at national and international levels, that the last lap could be successfully completed. It is not only the UNP that pays obeisance to India, but, almost all governments, with the exceptions of  JR and Premadasa, have given pride of place to relations with India. They make it a habit to make their first official visit after elections to be to India and today, for the first time in the history of the country, the High Commissioner of Sri Lanka to India has been accorded Cabinet Rank by the present government. I wonder if this is not deemed a diplomatic insult to Sri Lanka !!Emoji
Colombo Port with its upgraded facilities has become a very profitable venture today and i just cannot believe that it cannot handle vehicle imports to Sri Lanka that are mostly destined for Colombo !! In fact, for your information, a major portion of the Colombo Port earnings come from trans shipments to India.
I have certainly acknowledged and underlined the fact  that although the Chinese loans are around 15% of the total loans of Sri Lanka, (please see my first previous email), i have also emphasized that most of them have not given the expected ROI and even named them to be Magampura, Mattala, Sooriyawewa and Norochcholai. Furthermore, some of the reasons for Sri Lanka’s inability to have a strong economy and be able to  pay back loans, are also due to leakages in massive loss making public corporations such as Sri Lankan Airlines, Petroleum Corporation, Electricity Board, CTB and CGR and now even some of the State Plantations sectors !! Plainly, overstaffed, badly managed and corrupt !!
They are certainly not mainly because of other sovereign bond loans, but, due to combinations of the facts mentioned in the foregoing. It should also not be forgotten that the total borrowings during the period 2010-2014 were much higher than during the period 2015-2019.
As i have mentioned earlier, the quantum of borrowing can be justifiable if an economy’s productivity is high and they also have good export incomes. Even despite COVID debacle, some of the western economies are now bouncing back, whilst we are still struggling, due to factors mentioned in the foregoing. We have also lost out a lot due to bad timing in decision making, corruption and lack of productivity.
You are certainly wrong to say i have hatred towards the Paksa’s. To me, both RW and MR have let down the country very badly, despite the many chances they have had to take us to where Sri Lanka with its very talented human and natural resources should belong. The Coup is not the result of the useless Ranil alone, but, the scheming of the power hungry politicians including MR and MY3 [Sirisena]. Really, MY3 should take a major part of the blame for the lax in security for the Easter Bombing, particularly as the then President and Minister for Defense, one who had the full powers over the security establishment to prevent the same. And, it is no secret that this massacre and chaos certainly helped the present government to come to power. Today, the Cardinal who supported the government at elections is accusing the same government of not bringing to justice the real culprits responsible for allowing the Easter Sunday havoc, bloodshed and mayhem !!
Finally, as concerns Hambantota, as I mentioned in my previous email, the issue is not Hambantota, but, the timings and the manner in which the loans have been contracted.
I have taken due note of the 3 or 4 comments of the former paid employees of the project which you had quoted below.

   ****   ****

AN EXTENDED SET of COMMENTS from Edward UPALI in Canada, 25 September 2021**

Some Comments on Prithi Perera’s Point Number 1
I read with interest the discussions between Prithi Perera (P) and Gus Mathews(GM) on the Hambantota Port (HP). Although I am neither a Marine Logistics expert nor knowledgeable in Port Operations, I have given below my view on PP’s Point 1. I don’t live in Sri Lanka (SL) and do not know enough to write on the alleged corruption in Sri Lanka or about the legalities of 99 year leases. However, that  does not mean I love my motherland less.
PP’s  Point 1.: In his posting PP said that some of the cargo destined to Colombo is transported to Colombo and then diverted to Hambantota Port (HP), to provide business to HP.  PP said it was illogical. To a layman like myself, this operation seems illogical. However, looking at it more closely, the extra costs appear to be those of marine transport from Colombo to HP and  the ground transport from HP to Colombo.  Again, if the cargo ship has to wait in line for a few days to get a berth at Colombo to offload it’s cargo, the total costs could be different as seen from the analyses below.
i). The bulk of the motor vehicles imported to Sri Lanka are from the Far East. It is assumed that this marine transport cost upto the  Hambantota Port are = H,
ii). The cost of marine transport from HP to Colombo (one way) or from Colombo to HP is = A,
iii). The cost of waiting for a berth if required in Colombo is = C,
iv). Cost of Ground Transport to Colombo is  = D,
Option 1:Direct transport to Colombo + offloading without waiting = H + A,
Option 2: Direct Transport to Colombo + Waiting for a berth = H+ A+ C
Option 3: Direct to Colombo + Diverted to Hambantota Port + Ground transport to Colombo = H + A+ A + D
Option 4: Direct to Hambantota + Ground Transport to Colomb = H+ D
The cheapest option is either Option 1 or Option 4. However, if A, marine transport to Colombo from Hambantota to Colombo is greater than the cost of ground transport to Colombo D , Option 4 is the cheapest.  As Marine transport costs are in $, Option 4 may very well become the cheapest. Clearly the most  expensive Options are either Option 2 or Option 3., depending on the cost of C.
So it is apparent that there are several variables that have to be dealt with and it is not clear that offloading at Colombo port is sometimes not the best option for cargo even destined to Colombo, if long wait times are required for the ship to get a berth in Colombo, PPs conclusion that Option 3 is illogical actually depends on the cost of C
I believe SLPA officials in Colombo know what they are doing and when to divert a ship from Colombo to HP.  If so, PP’s criticism that ” diversion of motor vehicle cargo destined to Colombo to HP is illogical” is unfair.
Furthermore, after the LTTE terrorist attacks on the Galle Port in October 2006, the Government of SL realised that an attack on the Colombo Port was also a possibility, and if so the terrorists could severely damage the country’s economy. My view is that building SL’s second port at Hambantota, on the Belt Road was a good idea as it took advantage of the location of Hambantota  while enhancing the security of the country.  
Again, after the LTTE terrorist attacks on the BIA, passengers destined to land in Colombo were diverted to Chennai, and I believe also to Bombay and Maldives. After the attack, IATA – an international transport org, requested that SL seriously consider building another international airport, within 30 minutes of flying time from BIA. 
Although PP had not taken GM’s comments on the Mattala Airport as an Emergency Airport seriously, I believe the IATA request was one of the considerations for building an emergency Airport at Hambantota. PP’s point that Mattala is now being considered as a Maintenance, Repair and Overhaul (MRO) facility does not mean it cannot be used as an emergency airport, or why it cannot cater to passenger traffic.
Again while PP’s opinion that India is a friendly country is correct most of the time, there have been many instances in the past, when actions by India were not friendly. It is well known that India invaded SL in 1987 and that Prabhakaran got his early guerilla training in India, with India’s knowledge. Also, sometimes the Indian public is not well disposed towards SL. As was seen after Prabhakaran’s death, Sri Lankan passengers travelling on Indian trains were pulled out and assaulted by mobs in Chennai.
  ** The highlights here are the interventions of the Editor, Thuppahi. 

AN EMAIL  COMMENT from Gus Mathews in London in response to Ed-Upali’s Memo, 26 September 2021


Thank you for publishing Edward Upali’s understanding of the ‘Marine Logistics’ as regards Colombo and Hambantota usage. 
Unfortunately many in Sri Lanka in an attempt to criticise the Rajapaksa regime and their near authoritarian methods of dealing with pertinent issues miss ‘the wood for the tree’ and offer simplistic solutions that to a layman seems logical and noteworthy, but are far removed from the ground realities.
As I mentioned in my earlier debate with Prithi, marine logistics is a specialist field and Edward Upali has touched upon some of the issues as regards the use of Hambantota port. My son in Australia works in the ‘Marine Insurance Industry’ and has a masters degree in Marine Logistics and when I spoke to him about this he was quite scathing about amateurs offering simplistic solutions to complex logistical issues that encompass a myriad of other issues –– including  some that Edward has mentioned like ‘demurrage’ and contractual obligations. I am not qualified to comment on this and hence my comment to Prithi in the earlier email about working above one’s pay grade.
In a similar fashion aeronautical logistics is also a specialist field and though on a political level it is important to lessen dependence on a foreign power for an alternative airport, I am not qualified to comment on the impending economics it entails overall.
Corruption in Sri Lanka has been ongoing for decades and the building of Hambantota harbour or Mattala airport are not reasons for this decade-long practice, though opportunities exist for the corrupt when new projects come onstream. To contend that Hambantota and Mattala airport were predicated on ‘bucks for the boys’ is simplistic and facile.

A NOTE from Capt Elmo Jayawardena, 25 September 2021

In Addition, I took the liberty of asking Elmo Jayawardena about flight times and costs from Katunayake to the nearest Indian airport in comparison with that to Mattala [because these costs would impinge on the economic estimates of the airlines). His answer was as follows:

Hi Mike

To answer your question

1/ Pilots will use Mattala as the alternate to CMB.

2/ If Mattala was not there they would use Trinandrum

The fuel to Trivandrum is about 4500 KG

The Fuel to Mattala is about 2500 KG

If you use Trivandrum the pilot will burn about 7% of the extra 2000. Which is 140 KG Approximately

That will be the additional cost if Mattala was not there. As Mattala is there pilots should use Mattla as the Alternate.

But there is no justification to build a big airport to be used as an alternate. Airports are built for commercial reasons.

Read – “ Mattala – the Magnificent Mistake”

It was written by a pilot I know very well, his name is Capt Elmo Jayawardena.

Take care Mike …………………. Blue skies


SOME THOUGHTS from Michael Roberts, 26 September 2021

Captain Elmo’s reasoning does not get round the possibility that Indian government action, whether induced by Foreign policy interests or by the intervention of Tamilnadu political pressure,  could deny access to an Indian airport. Moreover, quite incidentally and in unantic1pated fashion, Mattala

A] came into one-off value as a transit point for the GoSL humanitarian operation that brought Sri Lankan citizens from Wuhan back to their motherland via quarantine in a military hospital in Diyatalawa —  an event to which one cannot attach monetary estimates.; for some details, see

and B] it is now serving, together with Galle harbour, as a transit point for ship’s crews to and from leave for a number of ships  ….  ….. AND

A MEMO from Prithi Perera, dated 24 September 2021

Dear Michael,  I just noticed the latest from Gus and exactly  as he says, wish to respond in a most simplistic and facile manner in order to economize  on the availability of each others  valuable times.
Right through our discussions what I have been attempting to underscore is the issue of the lack of ROI on investments and loans as being the root causes of our struggles or inabilities to pay back loans. Hence the references to Magampura, Mattala, Sooriyawewa etc…. and rightly or wrongly, it involves the periods of governance of the Rajapaksa’s who have ruled the roost for a major part of the last 16 years ! Therefore, it is not purposeful criticism, but happens to be so. In fact, today i happened to listen in on a recorded interview with Dr Indrajit Coomaraswamy, respected former Governor of the CBSL under the Program “Growth Lab Development Talks: Frameworks for Macro Economic Policies in a Pluralist Polity”. He was of the strong view that a major problem for Sri has been its dependency culture, deficit budgeting, politicizing economic decisions ending in losses to the economy and thereby resulting in the high costs of financing. Post independence and until the open economy, loans had been mostly from multilaterals where grace periods of 10 years, followed by 40 year repayment periods and very low interest rates even less that 2% had been the order of the day. And with the attaining of middle income status making concessionary loans less easy, the drops in export earnings and tax incomes soon after the 2019 elections have compounded the situation.
Given the above, it proves beyond doubt where our predicament lies, which may not require aeronautical and marine logistics specialists to pronounce on. To do so would mean “missing the wood from the trees” and being far removed from ground realities !!
I hope to have been simplistic and facile in responding in a brief but pointed manner, underlining as done in my previous emails the issues of Returns on Investments.
All my best, Prithi

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