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Joint venture sets Sri Lankan port buzzing again

By Pan Mengqi | China Daily | Updated: 2018-09-19 07:39
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Vessels arrive at the Port of Hambantota. PAN MENGQI/CHINA DAILY/ZHU RUIQING/XINHUA

Port a priority

In 2005, constructing a new port and connecting it to Colombo via a planned industrial belt was prioritized in Sri Lanka's "Mahinda Vision for the Future", proposed by former president Mahinda Rajapaksa. This aims to transform Sri Lanka into "a hub for sea transport, aviation, business, energy and knowledge".

Rajapaksa believed Sri Lanka needed a new economic growth engine, and Hambantota Port, close to the world's busiest shipping lanes, proved to be a good option.

"But Sri Lanka has a very weak industrial base, so there's little internal demand," Feng said of the challenges being faced. "We are developing this port very slowly, but steadily".

Feng said the model Hambantota International Port Group has adopted to develop Hambantota is the "port-parkcity" model, where an industrial park and a city are built after the initial development of a port. This model has catapulted the once-backward fishing port of Shekou in Shenzhen into a modern city.

The joint venture will set up an industrial zone at the port. It is hoped that the zone will act as an engine to drive economic development in the region, and gradually attract investors worldwide.

In the first half of this year, the joint venture between China and Sri Lanka, which was formally started in December, attracted 142 ships to berth at its docks, more than the number of vessels handled by the Port of Hambantota in the whole of last year.

Tissa Wickramasinghe, HIPG's chief operations officer, said automakers from Japan, South Korea and India have begun transshipping increasing numbers of vehicles through Hambantota, attracted by its convenient location, deep-water berths and the availability of storage space.

Since December, 55,959 cars have been shipped through Hambantota.

"Also, in less than a year, the value of land in the Hambantota area has increased three or four times, wages have tripled and rents have doubled," Wickramasinghe added.

Parakrama Dissanayake, chairman of the Sri Lanka Ports Authority, said, "You have one of the world's most experienced companies running the port."

He added that many countries together with international contractors and financial institutions competed for the contract to build Hambantota Port, but China Merchant Group offered the best proposal. This not only took into account building a port, but also considered how the port could be used to drive regional development.

In 1872, Li Hongzhang, a minister in the Qing Dynasty (1644-1911) who tried to modernize China, recruited Zhu Qi'ang, who had handled shipping for many years, to discuss trialing a new type of port authority in China. The China Merchants Steamship Navigation Co, established in Shanghai, became the predecessor of China Merchant Group.

At that time, Li and his company were struggling to break colonizers' monopoly on Yangtze River inland shipping. Today, CMG is one of the world's largest and most competitive companies in the transportation and aviation businesses.

It has built ports and highways in various countries to boost international connectivity, but the company believes that connectivity between people sometimes outweighs its huge construction programs.

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