Sri Lanka has formally handed over its southern strategic port of Hambantota to China on 99-year lease.
Two Chinese firms managed by China Merchants Port Holdings Company (CMPort) and Sri Lanka Ports Authority will own port and the investment zone around it.
Hambantota port is strategically located right in middle of vital energy supply lines in Indian Ocean, connecting Middle East and East Asia.
It had gained strategic significance after Sri Lankan government had decided to build massive deep-sea port and airport with huge Chinese loans.
The Sri Lankan government had signed a $1.1 billion deal in July 2017 to sell a 70% stake in Hambantota port to China.
The deal was signed after port suffered heavy losses, making it impossible for Sri Lanka to repay its debts to China which was used to open Hambantota port in 2011.
The 99-year lease deal had fanned concerns of countries with competing strategic interests with China, particularly India and US. Local residents of Hambantota are also protesting selling of “national assets to foreign entities” leading to violent clashes.