Thu, Jun 07, 2012 - Page 1 News List

US$1.5bn Chinese-built deep-sea port opens in Sri Lanka

STRATEGIC SHIFT:China is also building ports in Pakistan and is starting rail projects in Nepal, spurring India to ratchet up its own presence in the area


Hyundai cars manufactured in India are parked alongside the carrier ship Asian Sun after being unloaded at the start of international commercial operations at Sri Lanka’s Chinese-built Hambantota port yesterday.

Photo: AFP

Sri Lanka’s first Chinese-built port, a strong symbol of Beijing’s investment in South Asia, opened for international shipping yesterday with the handling of 1,000 cars from India.

The US$1.5 billion deep-sea port in southern Hambantota, the home constituency of Sri Lankan President Mahinda Rajapakse, straddles a major east-west shipping lane used by 200 to 300 international vessels daily.

The idea of the project, which was delayed by just over a year, is to create a new logistics hub to handle trans-shipments from the Asian region and provide a boost to Sri Lanka’s economy as it recovers from decades of civil war.

Regional power India turned down the offer to construct the deep-sea port, saying it was not commercially viable, but China’s presence created unease in New Delhi, which views Sri Lanka as being firmly in its sphere of influence.

China has since agreed to build a second port in Colombo and Chinese firms have pledged investments amounting to US$50 billion spread over the next 10 to 15 years, according to Sri Lanka’s trade ministry.

Elsewhere in South Asia, China has funded port facilities in Pakistan, a long-standing ally, and has plans for rail projects in Nepal, a traditionally India-aligned country where Beijing is increasingly influential.

Bangladesh has asked for Chinese help to build a port and Beijing recently opened an embassy for the first time in the Maldives.

According to Charu Lata Hogg, an analyst at Chatham House, a London-based think tank, India has come to terms with China in its backyard.

“There seems to be a tacit understanding that their commercial interests can be complementary,” Hogg said. “Indian cars going through a Chinese-built port in Sri Lanka reveals a lot about this relationship.”

The first shipment of cars yesterday in Hambantota, 240km south of Colombo, came from the south Indian port of Chennai and is destined for Algeria.

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