An investigation in Sri Lanka has concluded the nation’s state-run shipping line was ripped off by the Chinese in procuring vessels from the People’s Republic.
Ceylon Shipping Corporation claims a pair of ultamax bulkers – the Ceylon Princess and Ceylon Breeze – it ordered in China in 2014 were overpriced and the financing costs were higher than originally agreed upon.
In February 2014 the then Sri Lankan government sanctioned the line to buy two 63,600 dwt bulkers at AVIC International’s yard in Weihai for a price of $35m each. A $70m soft loan with the Chinese government turned out to contain far higher interest rates than originally agreed upon, necessitating Ceylon Shipping to take out an additional $10m loan to pay back the interest.
Ceylon Shipping, which can trace its roots back to 1971, has six ships at present with the two Chinese bulkers at the centre of the investigation the largest and most modern in its fleet.