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Sri Lanka says China to not operate oil bunkering

[Reuters, Tuesday, 3 August 2010 13:36 No Comment]

Sri Lanka said on Tuesday China would have no operational role in new oil bunkering facilities being built as part of a $1.5 billion port due to open in November on the island nation’s southern coast.

The Hambantota port is set to become Sri Lanka’s biggest and give the Indian Ocean country prime access to traffic on one of the world’s biggest East-West shipping lines, located a few kilometres off its southern coast.

China Exim Bank has loaned $77 million to help finance the oil bunkering operations, while the Chinese government also loaned another $400 million for the port, central bank data shows.

India, an ally of Sri Lanka, has expressed concern that China’s involvement in the port is aimed at making Hambantota part of a "String of Pearls" strategy to widen China’s political influence and boost its energy security.

"There is no role for China in its operation," Priyath Wickrama, the chairman of Sri Lanka Ports Authority, told Reuters.

"China has given us a loan, and one of their construction companies is helping in the port construction, but the oil bunkering and the port phase 1 operation will be carried out by Sri Lanka Ports Authority," Wickrama said.

Sri Lanka on Sunday said it would invite outside investors into the Hambantota port project, the keystone of a $6 billion post-war infrastructure revitalisation drive.

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