May 29, 2019

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

Key Highlights of the agreement: 

  • Location: 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. 

  • Ownership: 
    • The Sri Lanka Ports Authority (SLPA) retains 100% ownership of the East Container Terminal (ECT). 

    • The Terminal Operations Company, conducting its operations, is jointly owned. Sri Lanka will hold a 51 % stake in the project and the joint venture partners will retain 49%.

  • Cost: The joint initiative is estimated to cost between $500 million and $700 million.
    • Japan is likely to provide a 40-year soft loan with a 0.1 % interest rate.

    • Details of India’s contribution to the initiative are awaited.

  • Significance of the project for India: Over 70 % of the transhipment business at the strategically located ECT is linked to India.

  • Way Ahead: The specific terms of the agreement to jointly develop the ECT will soon be finalised at a joint working group meeting.

Source : The Hindu