Sri Lanka will proceed with the billion-dollar sale of a deep sea port to China despite protests in an effort to slash its foreign debt, the prime minister said Friday.

Hambantota port straddles the world’s busiest east-west shipping route and several countries, including neighbouring India, had raised concerns China could use it for its own military needs.

The port, built in 2010 with a massive loan from China and named after former president Mahinda Rajapakse, has failed to generate enough business to even pay staff salaries.

Port workers had called for strike on Friday to protest the deal, but cancelled it after the government used tough laws to outlaw industrial action.

Prime Minister Ranil Wickremesinghe said the government would sign off the $1.12 billion deal with China Merchants Port Holdings to jointly manage the facility on Saturday.

Cash from the Chinese firm’s majority stake will be used to repay part of the island nation’s huge foreign debt, he said.

An opposition faction loyal to Rajapakse scuttled a parliamentary debate on the sale Fariday, calling it a move to privatize the country’s assets.

The port has racked up losses of $300 million in the last six years, Wickremesinghe said.

 In addition state-run Sri Lanka Port Authority pays more than $60 million annually to service its debt pile.

“We now have a deal without the debt,” Wickremesinghe told reporters in Colombo.

Colombo said earlier this week that Sri Lanka’s navy will be responsible for the security of the port and no foreign navy will be allowed to use it as a base.

THE GUARDIAN