China could give up 20 percent of the initial shareholding of the proposed Hambantota port joint venture within a decade to allow others to buy the shares, a minister revealed on Wednesday.

Sri Lanka's Cabinet approved the proposal on Tuesday to enter into a concession agreement with China Merchant Port Holdings. Prime Minister Ranil Wickremesinghe described the proposal as a fair balance between the Chinese investor and the Sri Lankans.

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According to State Minister of International Trade Sujeewa Senasinghe, the Chinese firm shall agree to divest a maximum of 20 percent from its initial shareholding of 80 percent to a Sri Lankan party within a decade from the date of affectivity. Conditions were also laid out if the divestiture will take place within five months.

The initial joint venture will be incorporated under the companies act with 80 percent of equity to China Merchant Port Holdings and the remaining 20 percent to Ports Authority on a public-private partnership.

Senasinghe said that the proposed public-private relation would have a capital of $1.4 billion, and China will invest $1.12 billion, which is equivalent to 80 percent. The concession agreement will also see the Hambantota port with 1,235 acres of land to be handed over to the proposed joint venture. So far, no definite timeline has been laid out on when the final deal will be closed.

Following the concession agreement, the joint venture company will handle all the development and operating rights for port-related commercial activities without military rights.

The decision to change the initial deal, which China will get 80 percent of the shares of Hambantota port for 99 years for $1.1 billion, accords with President Maithripala Sirisena's view that any agreement with China should be such that it does not affect the interest of Sri Lanka.

Tagschina, Sri Lanka, China Merchant Port Holdings, Hambantota Port