The construction of the Adani Group-led terminal project at the strategically located Colombo Port officially commenced on Wednesday, a year after the Indian company sealed the deal with Sri Lanka Ports Authority (SLPA) and conglomerate John Keells Holdings.
Said to be the largest foreign investment — nearly $700 million — in the island nation’s ports sector, the West Container Terminal (WCT) project was offered as a “compromise” to India after Colombo unilaterally pulled out of an earlier trilateral agreement with India and Japan to jointly develop the East Container Terminal (ECT).
Explained: The Adani Group’s port deal in Sri Lanka
The Adani Group came in as the Indian government’s “nominee”, Sri Lankan authorities said, amid questions over the absence of a competitive bidding process. Subsequently, Sri Lanka roped in China Harbour Engineering Company (CHEC) to construct the second phase of the ECT. Sri Lankan officials said the company’s role would be “limited to civil works”.
As per the WCT agreement, the project will be executed through a 35-year-long build-operate-transfer (BOT) contract among the three parties. Adani International Port Holdings will have majority stakes of 51%, John Keells would hold 34%, and the SLPA, 15%. The first phase of the project is expected to be completed by the end of 2024, and the second phase, by mid-2026, authorities said. The project will have a cargo capacity of 300 million Twenty-foot Equivalent Unit (TEUs), officials said.
Speaking at the event, Indian High Commissioner Gopal Baglay said the WCT is “another bridge” between India and Sri Lanka to “promote shared prosperity through closer economic partnership.”
In addition to its investment in Sri Lanka’s ports sector, the Adani Group has also signed agreements to set up two renewable energy projects in Mannar and Pooneryn, in Sri Lanka’s Northern Province.
Published - November 09, 2022 07:24 pm IST
