Sri Lanka's Auditor General has said 170 billion rupees of debt taken to build Hambantota Port from China, which is about 1.2 percent of gross domestic product, has disappeared from state accounts.
Following the lease of Hambantota Port to a Chinese firm, the debt was to be taken off Sri Lanka Port Authority accounts.
The cabinet had decided to on July 20, 2017 the Treasury had taken responsibility to make payments on the Hambantota Port loans.
But the debt had not been included in the financial statement.
"Similarly the above balance had also been eliminated from the financial statements of Sri Lanka Ports Authority as at 31 December 2018," the Auditor General said.
Adding to the confusion the International Monetary Fund said in a May report said the debt was treated in a different way.
"Hambantota port related debt is recorded under the Sri Lanka Ports Authority (SLPA)," the report said. "Following the agreement on the long lease of the
Hambantota Port, the Treasury will make an annual transfer payment to SLPA for meeting the related debt obligations until SLPA becomes profitable and can service the debt."
The Auditor General had said that Sri Lanka's central government debt was about 87 percent of gross domestic product and not 8.29 percent of GDP as officially claimed.