Sri Lanka, Japan and India signed an agreement to jointly develop the East Container Terminal at the Colombo Port. The joint initiative is estimated to cost between $500 million and $700 million.
Sri Lanka will hold a 51 per cent-stake in the project and the joint venture partners will retain 49%.
Why project is strategic in nature?
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.
Japan is likely to provide a 40-year soft loan with a 0.1 percent interest rate.
Details of India’s contribution to the initiative are awaited, but New Delhi’s interest in partnering the project is well known. Over 70 per cent of the transhipment business at the strategically located ECT is linked to India.
Internal opposition in Sri Lanka
India’s possible role in developing the terminal had been opposed by some sections of government. President Maithripala Sirisena had opposed any Indian involvement in the project, as roping in foreign actors for developing “national assets” remains a politically issue.
President 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.