Hamnantota 2018 Bid Under Scrutiny after Wikileaks Report

August 29, 2011

2018 Commonwealth Games bidder Hambantota has been placed in the middle of the Wikileaks controversy after it was revealed that the United States Government believed that the Chinese were bribing Sri Lankan officials to win contracts linked to the redevelopment of the city.

The tsunami ravaged international airport, international port and railway line in Hambantota is being redeveloped by China in a major infrastructural development phase.

The new $1.5 billion Port is located about two kilometres from one of the world’s biggest east-west shipping lanes and is expected to attract up to 2,500 ships each year when it is fully open.

Phase One of the new Hambantota Port was constructed by the China Harbour Engineering Company at a cost of $360 million.

“It is likely that corruption and political patronage are significant factors playing into the focus on Hambantota,” said the cable sent from the US Embassy in Sri Lankan capital Colombo published on WikiLeaks.

“Often when Chinese companies win contracts, their success is due in part on their widespread distribution of graft to senior Sri Lankan Government officials.

“While it is currently unknown to what extent President Mahinda Rajapaksa is involved in Hambantota development, it seems logical that his hand is also out when commercial enterprises, especially the Chinese, jockey for contracts and projects.”

The Embassy cable also said: “There has not yet been private investment in the Hambantota Region, which could be a hard sell.

“Hambantota is located in the rural south, far from Colombo, there are no significant industrial industries nearby, so at least initially Hambantota will not benefit from local exports and imports. The Hambantota project has been Government directed, although private investment could emerge later if the project becomes commercially viable.”

In a comment to its observations, the US Embassy notes: “With Chinese and other foreign assistance, the GSL (Government of Sri Lanka), SLPA (Sri Lanka Ports Authority), and UDA (Urban Development Authority) are pushing ahead with plans rapidly and robustly to develop Hambantota.

“When the GSL master plan is completed, Hambantota will have a new seaport, international airport, rail links, roads, and local infrastructure. Despite this, there are no near-term prospects for significant commercial investment. The ‘international’ airport will only be used for charter flights.”

But Ajith Nivard Cabraal, the Hambantota 2018 co-chairman and Governor of the Central Bank of Sri Lanka, told explained during a visit to Britain last December that China’s influence in Hambantota had been exaggerated.

“China is just one of many countries who are investing in the region, along with India, Britain, Germany and the European Union, Sri Lanka has many friends.”

A decision on which city will host the 2018 Commonwealth Games is due to be made at the Commonwealth Games Federation General Assembly in St Kitts and Nevis on November 11.