India's port major Adani group will be among those who are likely to
operate the Colombo East terminal along with Japan and Sri Lanka Port
authority. Japan will not be giving loans to the project as per the original
proposal but will be one of the investors as per the new understanding
according to Sri Lankan media reports
The Adanis will be the Indian investor. It is hoped that the Adanis will
find the funds. Given the profitability of the East Container Terminal, getting
the required funds will not be difficult, it is said. India's stakes in the
project will be 15 per cent, the reports said.
Now that the Gotabaya Rajapaksa government has finally decided to get
India, Japan and the Sri Lanka Ports Authority (SLPA) to jointly develop the
Eastern Container Terminal (ECT) in Colombo port, the details are being worked
out with the three stakeholders, diplomatic sources said.
As per the new understanding, Japan will not be giving a loan to carry out
the project but will be one of the investors, along with India and Sri Lanka.
This is in accordance with Lankan President Gotabaya Rajapaksa's policy of
cutting down on debt and replacing debt with investment.
In May 2019 MoC by
Sri Lanka, India, Japan to jointly develop and run the ECT
Earlier, in May 2019, a Memorandum of Cooperation (MoC) was signed by Sri
Lanka, India, Japan to jointly develop and run the ECT. A Terminal Operations
Company (TOC) was to be set up for conducting all operations. In the TOC, Sri
Lanka would retain a 51 per cent stake, and the joint venture partners purchase
a 49 per cent stake with India accounting for 15 per cent. A 40-year loan at an
interest rate of 0.1 per cent was expected from Japan to fund the project. But
this is now being reviewed and Japan will be an investor and not a creditor.
Colombo port in desperate need to get the ECT working
There is a huge scope for business as Colombo port is now highly congested
and is in desperate need to get the ECT working. The partly finished terminal
is working with just three cranes. As on date Colombo port has a backlog of
20,000 TEUs. It will take four to five days to clear this, said SLPA chairman
Gen. (Rtd) Daya Ratnayake.