Jul 23, 2017

Grave financial risk to Ports Authority due to H’tota port loan Featured

The Sri Lanka Ports Authority is risking a grave financial crisis due to its having to repay the loans and the attached interest in lieu of the loss-incurring Hambantota port, SLPA sources say.

Subject minister Mahinda Samarasinghe has submitted a paper seeking cabinet approval for a 20,572 million US dollar payment before July 21.

The foreign assets department of the treasury has informed the SLPA to pay a 20,566 million USD installment and a six million USD interest.

SLPA has not allotted money

However, the SLPA budget approved by its directors on 23 June 2017 has not allotted money for such a purpose.

Furthermore, 1,236,821,243 USD and 20,879,037 USD loans have been obtained respectively from China’s Exim Bank and the Bank of Ceylon for the Hambantota port development and for the construction of a shipping and oil storage complex.

The SLPA had to channel 238 million USD from its income towards these constructions.

So far, it has invested 1,532 million USD on Hambantota port, and by 30 June 2017, it has repaid Rs. 14,546 million of the loan in addition to a Rs. 16,617 interest payment.

Except for the one obtained from the Bank of Ceylon, all the other loans for the Hambantota port had been obtained by the treasury.

Rs. 46,697 million loss

SLPA reports say the Hambantota port has incurred loss of Rs. 46,697 million between 2009 and 2016.

Due to the fluctuation of the rupee value against the dollar, a further Rs. 28,582 million loss has been incurred as well.

The sources say that as a solution, it is necessary to speed up the signing of a sponsorship agreement with China for the Hambantota port.

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