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China: Ties with Lanka based on ‘equal-footed consultation’

“We were never to give control of the port to China; that was a mistake,” President Rajapaksa said, pointing out the decision was made by the previous administration.

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Sri Lanka Hambantota Port

Colombo, Nov 30 : Days after Sri Lanka’s new President Gotabaya Rajapaksa called the Hambantota Port lease agreement with China a “mistake” and said it should be renegotiated, China in a statement said the cooperation between the two countries was based on “equal-footed consultation and win-win spirit”.

Responding to an email query by the Daily Mirror, the Chinese Foreign Ministry said, “Our cooperation, including the project of Hambantota Port, is based on equal-footed consultation and win-win spirit. It aims to help Sri Lanka to leverage the country’s own advantage for better development.

“China would like to work with Sri Lanka to build the Hambantota Port into a new shipping hub in the Indian Ocean, which will further boost local economic and social development.”

A spokesperson from the Chinese Embassy in Colombo, Luo Chong, told the Daily Mirror that the Hambantota Port was “totally owned and controlled” by Sri Lanka and any approvals and decisions regarding the port were to be taken by the Sri Lankan side.

“It is a joint venture and any approvals, including calling of ships at the Hambantota Port, is entirely Sri Lanka’s decision,” Luo said, the newspaper reported.

President Rajapaksa, in his first interview since taking office, said that while he remained committed to close ties with both China and India, he would re-negotiate the Hambantota Port lease agreement with China, terming it a “mistake” and calling on the Chinese company to be open to the move.

“We were never to give control of the port to China; that was a mistake,” President Rajapaksa said, pointing out the decision was made by the previous administration.

“The previous government gave it on a 99-year lease, and even though China is a good friend of ours and we need their assistance for development, I am not afraid to say that was a mistake.”

The President stated he would request the Chinese to renegotiate the joint venture and come with a better deal to assist Sri Lanka.

In July 2017, the Sri Lanka Ports Authority entered into a partnership with China Merchants Port Holdings (CM Port) to develop and manage the port.

Former Prime Minister Ranil Wickremesinghe in 2017 agreed to lease the port for 99 years to a venture led by China Merchants Port Holdings Co. in return for $1.1 billion.

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Business

Vodafone Idea to shut if it doesn’t get relief: Birla

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Kumar Mangalam Birla

New Delhi, Dec 6 : The country’s largest telecom operator will shut its business and move towards insolvency if it does not get any relief regarding the over Rs 40,000 crore adjusted gross revenue-based (AGR) dues it has to pay the Department of Telecom, Kumar Mangalam Birla, Chairman of Vodafone Idea, said on Friday.

Speaking at the Hindustan Times Leadership Summit here, Birla said that the issue of AGR is needed to be resolved urgently.

“We will shut shop if we don’t get relief, it could be the end of the story for us. There is no company in world that could get that kind of money in three months,” he said.

He further said that there will will be no further infusion in to the vent ure by either the Aditya Birla Group or Vodafone, however adding that, added that his telecom business cannot be called a failure.

The Supreme Court in a recent verdict allowed the Centre to recover Rs 92,641 crore in total AGR from telcos, which impacts Airtel and Vodafone Idea the most.

In November, the Department of Telecommunications (DoT) sent notices to the telcos, asking them to pay the AGR dues on a self-assessment basis within the next three months.

Speaking at the event, Birla, also said that the government has realised that telecom is a critical and strategic sector.

Following the statement by the Vodafone Idea Chairman, shares of the company on the BSE slumped and at 1.13 p.m., its shares were trading at Rs 6.84, lower by 0.47 paise or 6.43 per cent, from its previous close.

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Bankers surprised at RBI’s unanticipated holding of rates

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Shaktikanta Das

Mumbai, Dec 5 : Bankers and industry were surprised and disappointed on Thursday at the RBI maintaining its key interest rates unchanged, when they had been expecting the repo, or the central bank’s short-term lending rate, to fall below the current 5.15 per cent even as the second quarter GDP growth has fallen to 4.5 per cent.

The country’s largest bank state-run State Bank of India (SBI) said the status quo was unexpected.

“The RBI decision for a status quo, though an unanticipated policy surprise, is the most appropriate as monetary policy works with a lag. The lowering of the GDP growth for FY20 and FY21 reflects continued growth conundrums and a slow recovery,” an SBI statement said.

Thursday’s policy announcements have also given further push for the development of the secondary market for corporate loans by creation of self-regulatory body (SRB) thereby matching the global best practices in this regard, it said.

“Decision to allow OTC currency derivative transactions upto $10 million without evidence of underlying exposure will provide a fresh breath of life to this market giving it much required depth going forward”, SBI Chairman Rajnish Kumar, who is also chairman of the Indian Banks Association, said.

Zarin Daruwala, CEO, India, Standard Chartered Bank said “the MPC took a pause from cutting the repo rate to take stock of rising inflation, the fiscal situation and the lagged impact of the recent measures announced by the government. The MPC continued with its accommodative stance to support growth and has left the door open for future rate cuts. Additionally, the impetus for creating a secondary market for corporate loans should strengthen the system and provide liquidity.”

“The Monetary Policy Committee (MPC) shocked expectations by keeping rates on hold. While not acting today, the MPC has nevertheless acknowledged monetary policy space for future action. It also reiterated continuation with the accommodative stance as long as it is necessary to revive growth, while ensuring that inflation remains within the target”, said Suyash Choudhary, Head – Fixed Income, IDFC AMC.

The inflation trajectory was clearly a key reason for the pause. As per the RBI, retail inflation is likely to remain elevated in the fouth quarter due to food inflation, likely to taper off only after that.

“The RBI also cited many uncertainties between now and March 2020 with the upcoming Union Budget providing greater insight on the measures to be undertaken by the Government and its impact on growth and fiscal deficit”, Shanti Ekambaram, President – Consumer Banking, Kotak Mahindra Bank said.

Industry chamber Assocham said the temporary pause in cuts will leade to further transmission of lower rates.

“Temporary pause in softening interest rate cycle is to allow more transmission is a sensible approach by RBI”, Assocham said.

In a statement, Assocham President B.K. Goenka said that “temporary pause by the RBI to the policy interest rate reduction cycle, while keeping its stance accommodative, is understandable as long as it keeps nudging the banks to significantly pass the benefits of earlier rate combined Repo rate cuts of 135 basis points since February this year”.

He also said that by the RBI’s own assessment, against rate cuts of 135 basis points in the last 10 months, the transmission by the banks has been only 44 basis points.

“We agree with RBI Governor that there is no point announcing rate cuts mechanically, unless the actual transmission takes place at the ground level”. PHD Chamber said.

PHD Chamber of Commerce President D.K. Aggarwal said a significant cut in repo is expected in the coming bi-monthly monetary policy statements to induce demand and revive economic growth.

At least a 25 basis points cut was expected from the RBI to enhance the liquidity in the system and support demand in the economy , he said.

Industry chamber Ficci said it is disappointed that the central bank did not cut rates.

FICCI President Sandip Somany said: “The RBI has left the repo rate unchanged, which is contrary to what Ficci was expecting given the weakening growth scenario in the economy. We note with concern that the transmission of the earlier policy rate cuts has not happened adequately, and are disappointed with the decision to not cut the repo rate as there is need for continued action on the policy rate front.”

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Spectrum auction in Mar, DoT to seek cabinet nod in Dec

Any telecom player interested in buying spectrum for 5G service in 3,300-3,400 Mhz and 3,425-3,600 Mhz band will need to shell out at least Rs 9,840 crore as per TRAI’s proposal.

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New Delhi, Nov 28 : Department of Telecom is targeting spectrum auction in mid March, 2020, after its high powered committee on spectrum pricing decided in favour of TRAI’s recommended base price. The decision will be placed before the Cabinet for approval in December, official sources said.

“We are targeting March for spectrum auction for 5G and others. We will push for cabinet approval next month after taking Digital Communications Commission nod on prices. Our internal committee has cleared the TRAI base prices for all the bands, all processes are concurrently going on. The auctioneer will also be appointed shortly,” official sources said.

Telecom Minister Ravi Shankar Prasad had also in a written reply said on Wednesday that there is no reduction on prices for the spectrum auction envisaged.

The minister said: “The value of unsold spectrum as on date as p er valuation by TRAI in its recommendations on Auction of Spectrum in 700 MH z, 800MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz, 2,500 MHz, 3,300-3,400 MHz, 3,400-3,600MHz Bands dated August 1, 2018 is Rs 4.9 lakh crore,” Prasad said.

Any telecom player interested in buying spectrum for 5G service in 3,300-3,400 Mhz and 3,425-3,600 Mhz band will need to shell out at least Rs 9,840 crore as per TRAI’s proposal.

The minister also said the 275 megahertz of available radiowaves frequency between 3,300-3,400 Mhz and 3,425 to 3,600 Mhz band for 5G auction which is enough to launch 5G services in the country.

Industry bodies and telecom operators have been demanding a reduction in the proposed base price for 5G spectrum auction, claiming that the rate was t oo high.The DoT has set a target to roll out 5G in 2020. Swedish telecom gear maker Ericsson in its global study published early this week said that 5G connections are likely to be available in India from 2022.

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