- The former prime minister was forced to cancel the deal under pressure from the dockers union
- ECT located in Colombo port raises geopolitical concerns
- Sri Lanka has already given India a WCT and will develop it as a JV with John Keells
ECONOMYNEXT – Sri Lanka’s Colombo Port’s East Container Terminal (ECT) revenue hit a record high last year as it awaits a response from Japan after the government of President Ranil Wickleminghe offered the ECT.
Almost a year after the government unilaterally canceled a trilateral pact with Japan and India, the island nation’s decision to provide it to Tokyo came.
The state-owned Sri Lanka Ports Authority (SLPA) has already developed a 575m quay, adjoining yard area and connecting facilities at ECT at an estimated total development cost of $550 million.
A small but record income will be generated during the terminal’s 36-month construction period of civil works.
According to official government data, in the last 11 months, ECT earned Rs 1.1 crore.
In 2021, when trading slowed down due to the Covid-19 lockdown, it only made Rs 678.6 crore.
A tripartite agreement was signed between Japan and India in May 2019, but in February 2022, former Prime Minister Mahinda Rajapaksa said that the Colombo Port trade unions would be working to build a highly profitable terminal in the country. It unilaterally canceled the pact after opposing foreign countries that could enter one.
But President Wickremesinghe said last month that the ECT was offered to Japan after the West Container Terminal at Colombo Port was given to India’s Adani Group and developed as a joint venture with Sri Lankan conglomerate John Kiehl’s Holdings.
A government official said the Japanese government has yet to respond firmly to the proposal as Sri Lanka is suffering from an unprecedented economic crisis.
The terminal sits next to a $500 million Chinese-operated container terminal and a Chinese-owned landfill port city. The government approval of India and China came after considering regional geopolitical concerns, namely India’s suspicions of China’s role in the same port. The major business of transshipment and Indian ports accounts for 70% of the transshipment of Colombo port.
A final decision on the construction work was delayed amid pressure from the previous government to outsource the construction work to foreigners. The delay has cost the state more than Rs 250 crore in revenue since 2015, according to Treasury officials. (Colombo/Jan02/2023)