I remember when the Hambantota Port opened. It was all over the TV. They had dancers symbolizing water coming into the port. I thought it was kinda weird. Turns out the whole thing was symbolic anyways.
Sri Lanka’s Hambantota port needs extra loans of 147.9 million dollars to cover equipment including cranes, cost escalations in building the port, and digging the basin and entrance channel, the island’s state-run ports agency said. (LBO)
This is not entirely new, almost all construction projects suffer from cost overruns.
“Cost overruns in the order of 50 percent in real terms are common for major infrastructure, and overruns above 100 percent are not uncommon,” Bent Flyvbjerg, a professor of major program management at the University of Oxford’s Said Business School, writes in the Oxford Review of Economic Policy. (Bloomber)
Still, definitely not good. What’s especially odd is that the government ceremonially opened the port, despite the port being not at all ready to open. What’s circulating now is that there’s a giant irremovable rock blocking the port. While this doesn’t seem to be entirely true, they are still reporting a lot more ‘hard material’ that needs to be blasted. So, I suppose no rock is irremovable, given a large enough lever or, alternately, budget.
However with more hard material (such as rock) being found in practice the costs had gone up 45 percent for the basin (13.56 million) and 53 percent for the channel (31.02 million dollars) and reduction in soft material causing a net increase of 40.66 million dollars.
Increases in material, labour and equipment based on government price indices and an agreed upon formula had resulted in a total increases of 87.7 million dollars. Loans of 147.7 million dollars were being sought, which would also cover a building and port equipment. (LBO)
Which is like, well, OK, I mean, not really OK, but might as well finish the port. My question is, do we seriously have to build so much stuff in Hambantota? Why not invest $150 million in the natural port of Trinco, for example? Why pitch for a Commonwealth Games to build infrastructure down there?
Anyways, Hambantota Port. Open for cameras. Just not for business. Unless, of course, you’re the Chinese contractor.