2019 – Posted in: Daily News – Tags: China, Japan, Sri Lanks

EAST CONTAINER TERMINAL AT COLOMBO PORT

For: Preliminary & Mains

Topic covers: Container terminal- Significance, Role of India and Japan, India’s benefit,

News Flash

Sri Lanka, Japan and India signed an agreement to jointly develop the East Container Terminal at the Colombo Port.

Japan is likely to provide a 40-year soft loan with a 0.1 percent interest rate.
As per the agreement signed, the Sri Lanka Ports Authority (SLPA) retains 100% ownership of the East Container Terminal (ECT), while the Terminal Operations Company, conducting its operations, is jointly owned.
Sri Lanka will hold a 51 per cent-stake in the project and the joint venture partners will retain 49%.

East Container Terminal (ECT)

The ECT is located some 3 km away from the China-backed international financial city, known popularly as “port city”, being built on reclaimed land on Colombo’s sea front.

Significance

As a hub of the Indian ocean, the development of Sri Lanka and openness of its ports are of great importance. Colombo port is the leading port in region.
Sri Lanka’s Poer Authority said that around 70 per cent of Colombo Port’s transshipment business is India related.
Japan had cooperated since the 1980s to develop the port’s container terminals.
The involvement of India and Japan in the project can be seen as neutralising the growing influence of China, which has poured money into the South Asian island nation under its mammoth Belt and Road Initiative (BRI) infrastructure plan.

India’s benefit

Details of India’s contribution to the initiative are awaited, but, it is known that
Over 70 per cent of the transhipment business at the strategically located ECT is linked to India.

Flashback

Last Year, President Maithripala Sirisena had opposed any Indian involvement in the project, as roping in foreign actors for developing “national assets” remains a politically sensitive call in the island, especially among nationalist trade unions.

Mr. Sirisena and Prime Minister Ranil Wickremesinghe had a heated argument on the matter during a cabinet meeting in October 2018, with the PM apparently more inclined towards allowing Indian participation.

Sri Lanka and Japan

Japan had been part of negotiations even last year, the project assumed a predominantly ‘Sri Lanka-India’ dimension.
Japan has been a long-standing partner of Sri Lanka, and one of Sri Lanka’s biggest donors in the past decades.
Japan also helped develop of the Jaya Container Terminal at the Colombo Port, supporting its operations since the 1980s.

Source: The Hindu

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