Jun 11, 2018

China hesitates to pay final lease

China has taken measures to suspend the final lease payment of $ 585 million due to Sri Lanka for the Hambantota harbor.

The reason China has suspended the payment of the last lease amount was due to protests over handing over of an island near the Hambantota harbor which China had wanted for recreational purposes.

The government leased the Hambnatota port to a Chinese company for $ 1.12 billion on a 99 year lease agreement last December, claiming that it was difficult for the country to shoulder the debt burden.

However, despite China’s request for this island, the Sri Lanka Port Authority had notified China that this island should only be used for the Hambantota port related operations. Therefore, it is believed that China is delaying its final lease agreement over this dispute.