No final decision on India’s involvement in Colombo terminal: Rajapaksa

Sri Lankan Prime Minister Mahinda Rajapaksa.   | Photo Credit: Shiv Kumar Pushpakar

A year after the previous government signed an agreement with India and Japan to jointly develop the East Container Terminal (ECT) in Colombo, Sri Lankan Prime Minister Mahinda Rajapaksa has said “there is no final agreement” on the project.

Also read: Sri Lanka, Japan, India sign deal to develop East Container Terminal at Colombo Port

Addressing Tamil media editors on Wednesday, Mr. Rajapaksa said: “It was an agreement between former President Maithripala Sirisena and Indian Prime Minister Narendra Modi. But we have not taken a decision on it as yet.” The statement indicates that the project at the strategic port, coveted by India for years and discussed bilaterally at the highest levels, is still far from certain.

Development of the ECT has remained contentious in Sri Lanka, with nationalist groups objecting to any “foreign involvement” in running “national assets”.

Following much deliberation, Sri Lanka, Japan and India entered a memorandum of cooperation in May 2019, agreeing to jointly develop the terminal at an estimated cost of $700 million. While the Sri Lanka Ports Authority was to retain 100% ownership, a jointly-owned Terminal Operations Company — 51% stake with Sri Lanka, and 49% with India and Japan — was to run the terminal. Over 70% of the transhipment business at the strategically located ECT comes from India.

Also read: Sri Lanka keen on enhancing connectivity with Indian ports

Further, the Colombo-based weekend newspaper Sunday Times recently reported that the Adani group is in talks with John Keells Holdings, one of Sri Lanka’s largest conglomerates, exploring a possible partnership in the project.

Controversy around the ECT is not new. The development of the terminal was a major flash point between former President Sirisena and former Prime Minister Ranil Wickremesinghe. Mr. Wickremesinghe took the position that developing the terminal would help Sri Lanka emerge a shipping hub in the region, while Mr. Sirisena resisted any “foreign involvement” in managing “national assets”.

The ECT is adjacent to the Colombo International Container Terminal, which is a joint venture between China Merchants Port Holdings Company Limited and the Ports Authority, with the Chinese company holding 85% stake.

India and China’s competing geopolitical interests in the island are well known, but India-backed projects have often seen more vocal protest. Over the last few days, port workers protested against “Indian pressure” preventing Sri Lanka from developing its deep-sea container terminal. On Thursday, they called off the protest, after PM Rajapaksa promised to hold discussions.

The leftist Janatha Vimukthi Peramuna too has voiced strong opposition of Indian involvement. “They say it’s only the operations that will be shared. Have we come to a point where we can’t operate our ports?” party general secretary Tilvin Silva asked.

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Printable version | Oct 16, 2021 3:07:50 PM |

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