Revives Port Deal with Sri Lanka, India, Japan

Revives Port Deal with Sri Lanka, India, Japan

Sri Lanka has insisted that its ports will not be used for any military purpose. (Representative)


Sri Lankan President Gotabaya Rajapaksa on Wednesday announced the revival of an Indian and Japanese investment project to develop a deep-sea terminal in the port of Colombo, next to a $ 500 million Chinese-run container jet.

A tripartite agreement was reached by the previous government of Sri Lanka amid trade union resistance, but Rajapaksa said the East Container Terminal (ECT) would go ahead.

Rajapaksa’s office said, “The approval came after a review of regional geopolitical concerns, with India referencing doubts about China’s role at the same port.”

Officials said the terminal would be developed by the Sri Lankan government with 51 percent ownership and the remaining 49 percent as investment by the Adani Group and other stakeholders including Japan.

The state-wide Sri Lanka Port Authority (SLPA) entered into a memorandum of cooperation with Sri Lanka, India and Japan in May 2019, before Rajapaksa came to power in November 2019.

The deep-sea jetty is located next to the Colombo International Container Terminal, which is 85 percent owned by China and commissioned in 2013.

The remaining 15 percent is owned by SLPA.

India lodged a protest when Chinese submarines made an unannounced visit to the Chinese-managed terminal in 2014.


Since then, Sri Lanka has refused permission for further submarine calls.

About 70 percent of the transhipment container handled by Colombo was Indian export-import cargo.

In December 2017, Sri Lanka, being unable to repay a large Chinese debt, handed over another deep-sea port south of the island to a Beijing company, which raised concerns at home and abroad.

The $ 1.12 billion deal, first announced in July 2016, allowed a Chinese state company to take over the port of Hambantota, completing the world’s busiest east-west shipping route on a 99-year lease.

Both India and the United States are anxious to establish a Chinese foothold at Hambantota, 240 kilometers (150 mi) south of Colombo, that could give a military naval advantage in the Indian Ocean.

Sri Lanka has insisted that its ports will not be used for any military purpose.

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