China Merchants Holdings (International) Company and China Harbour Engineering Company Ltd. (the China Joint Venture) yesterday reached agreement with Sri Lanka Ports Authority (SLPA) on key terms in relation to the development of Phase II of the Hambantota Port Project.
Under the deal, the China Joint Venture and SLPA will enter into a supply, operate and transfer agreement (SOT Agreement) and establish the Project Company that will gain the right to operate the Hambantota Port new container terminal which will comprise of two 100,000 DWT container berths and two 10,000 DWT feeder berths.
The concession period to be granted to the Project Company under the Agreement shall initially be 35 years from the commencement of operation of the Company, with the option for five more years.
The total capital investment to be made by SLPA and the China Joint Venture into the Project Company shall be approximately $601 million and the capital investment to be made by the China Joint Venture into the Project Company shall be approximately $391 million, resulting in the China Joint Venture having a final shareholding in the Project Company of 64.98%.
[mappress]
September 17, 2014