Sri Lanka's $1.12 billion Hambantota Port deal with China is poised to spark legal issues as amended legislations are reportedly required before the port could be handed over to a private company, legal experts said as reported by the Sunday Times.

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Earlier this month, Sri Lanka has signed an agreement in principle to sell 80 percent of its deep-water port to China's Merchants Port Holdings Co. (CHMPC). And the Hong Kong-based firm is set to start the port's takeover early next month.

The Sunday Times reported that the main services offered by the port owner, operator, regulator, navigator, and others now under the custody by the SLPA are to be handed over to the CHMPC under the joint venture.

However, a senior official at the Attorney General's Department said that the changes could not be carried out unless the Sri Lanka Port Authority (SLPA) Act has been amended. The official further noted that even before entering the joint venture agreement, the Act should be have been amended with parliamentary approval after it has sought a legal advice from the attorney general.

Then if at least a 99 percent lease agreement has been signed and terms fulfilled or waived, the deal now becomes a binding contract between the SLP and CHMPC and cannot be amended unless both parties favor the changes.

It is not clear though if the Hambantota Port contract will specify the roles of who owns and manages. "While ports are managed by private parties, harbors are generally under the control of a state as it involves national security," an expert noted.

Meanwhile, the Arjuna Ranatunga, Minister of Shipping and Ports, also stressed that the Hambantota Port "deal" with China is not the "Final Agreement" yet and it could still be negotiated. Changes could be made between now and Jan. 8, 2017 during the signing of the Final Agreement, the New Indian Express reported. He added that if the SLPA will not be granted power to ensure port security, then he will not sign the agreement.

TagsHambantota Port, Hambantota Port China, Hambantota Port Project