The previous Yahapalana Government signed a Memorandum of Understanding (MoU) with India and Japan to lease out the East Container Terminal of the Colombo Port to a terminal management company to be registered in Sri Lanka. The original MoU says the company will retain 51 percent of the stake and the rest by the nominees of the Indian and Japanese Governments. A loan was to be raised from Japan to develop it.
After some modification of the MoU, the present Government planned to develop the terminal 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. But, the trade unions, backed by politically influential members of the Buddhist clergy and some ruling party allies, built pressure on the government against the move, finally prompting it to renege from the 2019 MoU. It resulted in diplomatic relations with India and Japan hitting a new low. India persists with its interests in a stake of a company managing the ECT, and it is yet to spell out its stand on the proposal by Sri Lanka to develop the West Container Terminal as an alternative to the ECT project.
Obviously, geopolitical interests have driven India to stake a claim here since it is concerned about the Chinese presence in the region. It is not yet clear how India- Sri Lanka relations will play out in the future after the spat involving the ECT. Bilateral relations have always been marred by irritants. Given the past aberrations, it is natural for Sri Lankans to suspect any tough action or arm-twisting by India.
This story is from the February 18, 2021 edition of Daily Mirror - Sri Lanka.
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This story is from the February 18, 2021 edition of Daily Mirror - Sri Lanka.
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