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Friday, January 13, 2017

JANGAN MAIN MAIN DENGAN CHINA

China Tells Sri Lanka: We Want Our Money, Not Your Empty Airport

Wade Shepard ,   CONTRIBUTOR
I travel to emerging markets around Asia and report on what I find.  

Sri Lanka has a debt problem. After more than a decade of taking out huge loans to build large-scale infrastructure -- most of which hasn't yet produced adequate returns -- the country is now struggling to make payments, and is looking for another way out.

A potential exit strategy was to offer China debt for equity swaps, which Sri Lanka's Prime Minister Ranil Wickremesinghe recently proposed to China’s Ambassador Yi Xianliang. China was offered varying degrees of control over some of Sri Lanka's biggest infrastructure projects, including Mattala International Airport and portions of the Hambantota deep sea port, and Sri Lanka would receive some debt relief.


China's response to this offer was publicized earlier today in Colombo's Sunday Times: We're not interested. The Chinese ambassador replied that "it was not possible according to China’s laws."

However, China was clear that it extends its "fullest cooperation" and that such deals should be conducted via investors on proper commercial terms.

This point is key: while China's government will not swap debt for equity they will help clear the road for Chinese companies to take over key projects in Sri Lanka. IZP, a Chinese informational technology company, has been put forward as a potential purchaser of Mattala International Airport, while COSCO is looking into expanding operations at the Hambantota deep sea port.


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IMG_20160218_111424_DCE
Not a passenger in sight. It is still the morning and no more flights are to arrive or depart. Mattala International Airport may just be the world's emptiest. Image: Wade Shepard.

The problem, both for Sri Lanka and for any would-be investor, is that many of the large projects in question are losing money fast, and may ultimately prove to be economically unsustainable -- at least without a massive amount of additional investment, more infrastructure, and a miracle or two. With just two flights per day, Mattala International is more than likely the most underused international airport on the planet and the Hambantota port is also running at severe under-capacity, while the brand new and fully modern highways that run through this region are mostly devoid of vehicles.

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However, not all hope is lost for these projects -- yet. Although China declined a debt for equity swap, their participation in Sri Lanka's infrastructure development is more than likely just getting started. Colombo Port City has been green-lighted once again and just last week China requested 15,000 acres of land in Hambantota for the building of a massive, million worker special economic zone. The latter seems to run flush with the original Hambantota idea:


"If you're going to have a bulk port you need to have industry around the bulk port to take advantage of it," said Deshal de Mel, a senior economist at Hayleys Plc in Colombo. "That is where the whole idea comes from; that we'll have industry coming in to kind of match up to the port. So the shipping port can still be made to work if they can get the right industries to invest in it."

Sri Lanka's debt situation is severe. The country is currently in $58.3 billion deep to foreign financiers, and 95.4% of all government revenue is currently going towards paying back its loans. This means that out of every hundred dollars the government brings in only $4.60 is going towards essentials like education and public services.

Beyond China, Sri Lanka has called for proposals from investors worldwide who may interested in taking on their Hambantota projects, just in case you're looking for a challenge.

I'm the author of Ghost Cities of China. I'm currently traveling the New Silk Road doing research for a new book. Follow by RSS.

11Comment on this story
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17 comments:

  1. LRT sbk ke kj telah dibuka kpd natizen hampir sebulan dn buat permulaan free of charge.Untuk record dlm masa beberapa hari sahaja lrt sbk ke kj tlh mencapai jumlah penumpang melebihi sejuta.Ini membuktikan prejek lrt tersebuk mempunyai impak yg tinggi didlm menjana hasil.Berkenaan pelaburan terbaru oleh syarikt China didlm projek krajaa Msia berdasarkan kemajuan yg tlh ditunjukkn oleh beberapa renek sblum ini tiada msalh untuk membayar balik wang pelaburan tersebut.

    ReplyDelete
    Replies
    1. Ini cara komen yang baik walaupun berbeza pendapat.

      Delete
    2. Ini cara komen yang baik walaupun berbeza pendapat.

      Delete
  2. Agaknya dlm sebulan berapa ramai org naik keretapi ke pantai timur yer, bila dah siap nanti? Boleh bayar hutang 55 billion tu?

    ReplyDelete
    Replies
    1. InshaAllah.... kawan dengar khabar si Kelantan sedang di bina sebuah pelabuhan yang besau.... betui ka?.... boleh sesiapa beri pencerahan?

      Delete
    2. soalan tu saya jawab dgn mudah. hujung minggu yg ada cuti 3 hari berturut-turut, ada cuti umum, cuti perayaan, paling tidakpun 2 minggu sekali, jalanraya dari gombak sampai ke kota bharu akan sesak teruk. jadi makna kata, keretapi tu nanti akan jadi pilihan pengguna utk ulang alik kl-kelantan.

      #saya berada di tempat yang saya sebutkan.

      Delete
  3. Berasaskan kepada keadaan geografi pantai timor Malaysia dengan hubungan jalanraya nya yang jauh dan meletihkan walaupun melalui lebuhraya, rasanya sistem keretapi yg akan dibina akan menjadi pilihan utama terutama dimusim perayaan.
    Dijangka juga dengan ada nya perkhidmatan keretapi tersebut, kadar kemalangan jalanraya dimusim perayaan akan menurun.

    ReplyDelete
  4. Makin kuat blog Ni menhasut..Elok tutup je blog ni

    ReplyDelete
    Replies
    1. Menghasut... Mengfitnah tu je yg tau.... Yg benar tetap benar yg salah tetap salah terima dgn fikiran terbuka

      Delete
  5. Mesia x mcm sri lanka atau kerala di india... kikiki.. mamak kerala jer yg rasa mesia mcm sri lanka. ...

    bila dah tak ada kuasa trrasa mesia mcm kerala di india pulak dah....

    Jangan lupa update perhimpunan juta juta ahli pati cop bunga di sas alam ari ni..... jsngan lupa tau.... kikikiki.... masas ug nk disampaikan jidin ptg nih... update jgn tak update....

    ReplyDelete
    Replies
    1. Jangan takut... Ckp campak gelas pun tak pecah... Ni dah mengigil knp?

      Delete
  6. http://khairulryezal.blogspot.my/2017/01/pkr-kerah-bas-penyokong-hadir-himpunan.html?m=1

    link atas.... patut la budak suman... joe harry lansung x bersiaran lepas salah fakta pasal IKM... kikiki.. ted manof lalok cium kentut sediri lam botol... budak suman tak mengomen .... ari ni himpunan juta juta pati cop bonga di sas alam... dengar amanat mamak dan jidin setelah 22 tahun tak sampai amanat... kikikiki.... KD wajib update... klu x update nnpk ssgt ada yg x kena dng himpunan cop bonga .... kikikiki..

    ReplyDelete
    Replies
    1. Ini namanya setiakawan... Yg umno n Terutama baju merah kerahkan Org kg Org felda tak Nak komen pulak...ni namanya hipokrik... Awak je yg bolih Org lain tak bolih

      Delete
  7. Bila masa org felda diangkut....klu PAU pun dah cukup 1 dewan..... apa pun KD update tauuuuu... amanot si mamak dan si jidin.... bila dah dengar amanat balik umah baru bole nak klimaks 4 kali ....

    ReplyDelete
    Replies
    1. Tak mengaku lg...tiada Org felda umno berkubor

      Delete
  8. Perhimpunan BERSATU akan gagal:
    1) Dedakians dilarang masuk
    2) Nak ke perhimpunan, ahli kena bayar tambang sendiri, siapa nak pergi?
    3) Tiada liputan tv3, muka tak masuk tv, tak best
    4) Bahagian tak ada cawangan tak ada, mana mungkin boleh ramai
    5) BERSATU tidak peelu tunjuk kekuatan sebenar, kalau datang 2000 orang pun dah kira ok
    6) BERSATU sedang berpecah, kem mahathir, kem mukhriz, kem muhyiddin dan kem busuk hati pun nak hadir juga.

    ReplyDelete