Sri Lanka has decided to scrap a deal with India and Japan for the development of a port terminal in the country.
In January, President Gotabaya Rajapaksa confirmed a plan to develop the East Container Terminal (ECT) of the Colombo Port as an investment project that has 51% ownership by the state-owned Sri Lanka Ports Authority (SLPA) and the remaining 49% as an investment by India’s Adani Group and other stakeholders.
During a Cabinet meeting headed by Prime Minister Mahinda on 1 February, the Sri Lankan government decided that ECT would be operated as a “wholly owned container terminal" of the SLPA.
On his official Twitter account, Mr Rajapaksa said on 1 February that he had: “Met the Eastern Container Terminal (ECT) workers trade union to assure them that the terminal will not be sold or leased to any foreign entity. The #lka ports authority will maintain control of the ECT. #GoSL adheres strictly to its policy of retaining assets belonging to the govt.”
India has called for Sri Lanka to honour the agreement.
The previous administration agreed to sell the ECT to India. The agreement envisaged obtaining a loan from Japan after sale and purchasing construction equipment with the loan money.
In January, the Government confirmed that the operation of the West Container Terminal would be handed over to the SLPA. However, the government now plans to develop this terminal with investment from India and Japan.
ECT is located next to the Colombo International Container Terminal, which is 85% owned by China and 15% owned by the SLPA.
