Infrastructure
China Commits To Develop Strategic Infra In Sri Lanka Amidst Debt Restructuring Talks
Port in Sri Lanka (X)
On Wednesday (27 March), Sri Lanka's Prime Minister disclosed that China has committed to enhancing the island nation's vital deep sea port and the airport in colombo, following discussions with his Chinese counterpart in Beijing.
Prime Minister Dinesh Gunawardena highlighted that China, Sri Lanka's largest bilateral creditor, would offer support for the country's external debt restructuring, a crucial requirement for maintaining a $2.9 billion International Monetary Fund (IMF) bailout.
Gunawardena mentioned China's offer to support the development of Colombo International Airport and Hambantota port, although specifics were not provided,
Although Beijing's stance on debt restructuring remains undisclosed, Sri Lankan officials have indicated that China is hesitant to negotiate the terms of its loans but may consider extending their duration and adjusting interest rates.
Sri Lanka faced a foreign exchange crisis in 2022, leading to a sovereign default on its $46 billion foreign debt, prompting widespread protests and removal of the then president Gotabaya Rajapaksa from office.
Gunawardena's office reported that Premier Li Qiang assured continuous assistance in Sri Lanka's debt restructuring process and pledged to contribute to the country's economic development, reports The Hindu.
Hambantota port, situated on the island's southern coast, was leased to a Chinese state-owned firm in 2017 for 99 years at $1.12 billion, raising concerns in neighbouring India about potential security implications. Both India and the United States fear that Chinese control of Hambantota could strengthen its naval presence in the Indian Ocean.
Sri Lanka has assured that its ports will not serve any military purposes, but India has objected to Chinese research vessels visiting Hambantota, citing concerns of espionage.
Notably, a Japanese-funded expansion project for Colombo airport had been suspended following Sri Lanka's debt default.
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