Hambantota Port: Constructional Details, Issues with the Port

By : Neha Dhyani

Updated : Feb 24, 2022, 10:06

The Hambantota port is located on the southern shore of Sri Lanka. It is also known as Ruhunu Magampura International Port or Magampura Mahinda Rajapaksa Port. This port was built after attaining financial help from China that was attached with a set of strategic and commercial reasons. Sri Lanka received a financial loan from the Export-Import Bank of China, and the contract was awarded to China Harbor Engineering Company (CHEC) and Sinohydro Corporation.

Details on the construction of the Hambantota Port

Event	Year
Hambantota port project launch	2007
Port construction initiated	2008
Phase I construction completed	2011
Phase II construction completed	2015
Hambantota port incorporated in Belt and Road Initiative	2013
Hambantota port leased to China Merchants Port Holding Company Limited	2017
Hambantota International Port Group (HIPG) entered into their first Terminal Service Agreement with K-Line PTE Limited	2018
HIP recognized at Global Ports Forum Awards 2020 in Dubai with nominee award for “Terminal of the year 2020/ Multi-purpose Port”	2020

More about the Hambantota Port

The Hambantota Port was constructed after China lent $361 million for the first phase and another $810 million for the second phase. The two phases included the construction of 10 berths for container handling, cargo handling, poor marketing skills, and liquid bulk. The port handles around 6000 vessels in a year.

Issues with the Hambantota Port

The port operated from 2012 to 2016. However, it failed to attain profits due to poor governance, lack of industrial activities, and failure to attract traffic. This failure in revenue and profit generation resulted in loss and the obligation of returning the loan taken from China for the construction of the port.

Ports in coastal countries are observed more than commercial assets as they also help build strategic moves. The Hambantota Port has gained a lot of attention because of several controversies. It is also considered a strategic move or a debt trap set by China to develop a foothold in the region. In July 2017, the Sri Lankan government had no option left than to give away the port on lease for 99 years to China Merchants Port Holdings Company Limited (CM Port). The port is currently seeing good growth and volumes of maritime trade.

On 30th September 2021, an Indian company, Adani Group, entered the scene and made a $700 million deal for building a deep-sea container terminal in Sri Lanka. The deal was jointly made with John Keells Holdings and Sri Lanka Ports Authority. The new jetty of 1.4 kilometres with a depth of 20 meters will be built next to the Chinese-run Jetty. Adani group will have a 51 per cent stake in the partnership, and John Keells will have 34 per cent. For the Sri Lanka port industry, this is the largest foreign investment.

This new development will bring several benefits to all the stakeholders. With this change, India can now have some control and access to important ports.

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FAQs About Hambantota Port

Where is the Hambantota Port located?

The Hambantota Port is located on the southern shore of Sri Lanka.

Which Chinese company is the Hambantota port leased to, and for how many years?

The Sri Lankan Government leased the Hambantota port to the China Merchants Port Holdings Company Limited (CM Port) for 99 years.

Which Indian group has recently invested in building a container terminal in Sri Lanka?

The Adani Group has made a $700 million investment in building a container terminal in Sri Lanka.