Govt. inks deal with Japan and India to develop East Container Terminal

From left: Japanese Ambassador Akira Sugiyama, Ports, Shipping and Southern Development Minister Sagala Ratnayake and Indian High Commissioner Taranjit Singh Sandhu signing the memorandum of cooperation in Colombo 

Sri Lanka yesterday inked a memorandum of cooperation (MOC) with the government of Japan and India to develop the East Container Terminal (ECT) of the Port of Colombo.

According to a SLPA statement issued to media this week, while keeping 100 percent ownership of ECT with SLPA, a Terminal Operations Company (TOC) conducting all ETC operations will be set up—Sri Lanka retaining 51 percent and the joint venture partners purchasing 49 percent stake.

“The three governments will work out details based on the MOC at joint working group meetings, and advance their cooperation towards early commencement of work and operation of the ECT,” a joint press release issued after the signing of MOC yesterday said.

To implement the project Sri Lankan government is expected to receive a concessional loan from Japan, which “carries one of the best loan terms Sri Lanka has obtained,” according to SLPA. The tug of war between President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe had significantly delayed the development of ECT. 

President Sirisena had reportedly opposed any move to get private sector involvement in the development of ECT, even in the form of a public private partnership (PPP) deal.

The government in late 2016 called for Expressions of Interest (EoI) for the development of the ECT, and seven parties submitted applications. However, the development contract was never offered to any of the parties due to disagreements between Sirisena and Wickremesinghe.

The ECT’s first phase was completed in 2015 with a US$ 80 million loan from Bank of Ceylon (BOC).  A part of the terminal is equipped with a 440 metre quay berth and an 18 hectare yard in addition to other equipment. 

The ECT is located at the newly expanded south part of Port of Colombo.

Port of Colombo currently operates with three main terminals—Jaya Container Terminal operated by SLPA, South Asia Gateway Terminal operates by John Keells Holdings and Colombo International Container Terminal operated by China Merchant Holdings.