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Sri Lanka PM says China to develop strategic infrastructure

March 30, 2024
in Science
Sri Lanka PM says China to develop strategic infrastructure
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Sri Lanka PM says China to develop strategic infrastructure
by AFP Staff Writers
Colombo (AFP) Mar 27, 2024

Sri Lanka’s prime minister said Wednesday that China has pledged to develop the island nation’s strategic deep sea port and the capital’s airport after talks with his counterpart in Beijing.

Prime Minister Dinesh Gunawardena said China — the island’s biggest bilateral creditor — would “assist” Sri Lanka’s restructuring of external debt, a key condition to maintaining a $2.9 billion IMF bailout.

Beijing’s position on debt restructuring has not been made public, but Sri Lankan officials have said China was reluctant to take a haircut on its loans but could extend the tenure and adjust interest rates.

Sri Lanka in 2022 ran out of foreign exchange to finance essential imports and declared a sovereign default on its $46 billion foreign debt.

Months of protests forced then-president Gotabaya Rajapaksa out of office.

Gunawardena’s office said Premier Li Qiang had promised China would “assist Sri Lanka’s debt restructuring process continuously and help Sri Lanka to develop its economy”.

Gunawardena said Beijing had offered “assistance to develop” Colombo International Airport and Hambantota port, the statement added, without giving further details.

A Japanese-funded expansion of Colombo airport had been on hold since Sri Lanka’s sovereign debt default.

The southern sea port of Hambantota was handed to a Chinese state-owned company in 2017 on a 99-year lease for $1.12 billion, sparking security concerns in Beijing’s regional rival India.

India and the United States are both concerned that a Chinese foothold at Hambantota, on the island’s southern coast, could boost its naval advantage in the Indian Ocean.

Sri Lanka has insisted its ports will not be used for any military purposes, but New Delhi has objected to Chinese research vessels calling at Hambantota fearing that they could be used for espionage.

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