12 April 2024 (Lloyd's List) - SRI LANKA’s Hambantota International Port Group owned by China Merchants began its container operations this week, having handled transhipment cargo carried by Mediterranean Shipping Co.

The port operator said in a statement it had received a call by the 4,396 teu MSC Ingrid (IMO: 9181651) from Rotterdam on April 9 and discharged 500 teu of containers on board.

The cargo will be loaded on to the 2,169 teu MSC Sky II (IMO: 9162277), due to arrive April 16, for shipment to Dubai.

“With MSC’s collaborative partnership, HIPG will now look at expanding our investment in equipment and other infrastructure facilities, enabling us to service larger vessels on the east west shipping route,” said the port operator’s chief executive Johnson Liu, who is also the chief representative of China Merchants in Sri Lanka.

The launch of Hambantota’s container business is expected to ease congestion at Colombo port, located about 250 km northwest, which is also operated by the Chinese state giant.

Colombo is now widely used by major carriers to connect Europe cargo to the Middle East Gulf via feeders, after direct calls to Saudi Arabia and others were disrupted by the Red Sea crisis.

China Merchants took over Hambantota port in 2017 under a 99-year concession via HIPG, in which it has an 85% stake. The remaining 15% is owned by Sri Lanka Ports Authority.

However, the project was once mired in controversy, as critics viewed it an example of the South Asian island nation falling into debt traps set by Beijing, after the former’s government failed to replay loans extended by the Export-import Bank of China.

Former Sri Lanka President Gotabaya Rajapaksa had indicated he hoped to renegotiate the Hambantota port deal, although that did not materialise.

The first phase of operations at Hambantota started in 2011, with the second phase following in 2015. Beijing has committed continued investment into HIPG with the aim to make it a gateway and transhipment port.