Adani Group Of India To Develop Western Container Terminal At The Colombo Port

On Thursday, India’s Adani Group finalized a deal with the Sri Lanka Ports Authority (SLPA) to run operations at the Western Container Terminal or WCT at Colombo Port. As the first port operator from India in Sri Lanka, Adani Group is expected to be holding a 51% stake at the WCT.

Besides, the Adani Group has also opted to seal a build-operate-transfer (BOT) with John Keells Holdings, the local partner, and the SLPA to develop the WCT. Local bodies would be holding 34% and 15% stakes of the West Container International Terminal – the new joint company,

The Colombo Port is among the busiest and most favored regional hubs when it comes to the transhipment of containers from India and mainline ship operators. It makes up 45% of Colombo’s transhipment volumes to or from Adani Ports and SEZ Ltd, popular as APSEZ. The latter is India’s largest port operator and developer. It represents 24% of the country’s port capacity.

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WCT’s proposal came through after Sri Lanka was sure of retracting the memorandum of understanding that was signed in 2019 with Japan and India on the Eastern Container Terminal popular as the ECT.

The SLPA had signed a memorandum of cooperation in 2019, whereby Japan and India would be developing the ECT when the Sirisena government was in power.

The trade unions of Colombo Port were against the proposal, whereby Indian investors and Japan were to hold a 49% stake in the ETC. They demanded the ECT to be completely owned by the SLPA instead of having a stake of only 51%.

Under extreme pressure asserted by the trade unions, Mahinda Rajapaksa, the Prime Minister, finally agreed to scrap the deal, compelling India to urge Sri Lanka to abide by its faithfulness with respect to the trilateral agreement.

Japan and India was not in support of Sri Lanka when it unilaterally undertook an international agreement. Japan had reportedly conveyed its dissatisfaction with Sri Lanka’s government.

India and Japan are part of the Quadrilateral coalition or “Quad” that includes four Indo-Pacific nations. The other countries are Australia and the US. In 2017, the four countries had given shape to the long-pending proposals of setting up the ‘Quad’ as a measure to stand up against China’s aggressiveness in the Indo-Pacific region.

China’s influence is exponentially on the rise in Sri Lanka. China has invested more than USD 8 billion in several Sri-Lanka-based infrastructure projects. In 2017, Colombo had to hand over Hambantota port to Beijing as part of a debt swap.

Reference: economictimes.indiatimes.com

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Source: Maritime Shipping News