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Sri Lanka opts out of port deal with India
The development marks the latest twist in the troubled project to develop the East Container Terminal (ECT) of Colombo port under a trilateral agreement signed in 2019 by the governments of India, Japan and Sri Lanka.
India on Tuesday said it expected Sri Lanka to abide by an agreement on the trilateral development and operation of a key port terminal in Colombo after the Rajapaksa government decided to hand over the facility to a state-run body.
The development marks the latest twist in the troubled project to develop the East Container Terminal (ECT) of Colombo port under a trilateral agreement signed in 2019 by the governments of India, Japan and Sri Lanka.
The Sri Lankan government has succumbed to pressure from labour unions, which are opposed to a joint venture with Indian and Japanese investors having a 49% stake in the ECT. On Monday, its cabinet decided to run the facility as a fully- owned operation of state-run Sri Lanka Port Authority (SLPA).
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During a meeting with labour unions, Prime Minister Mahinda Rajapaksa said he had already announced that the ECT “will not be handed over to any foreign country or institution”.
Following this assurance, the unions agreed to suspend a protest that was to begin on Tuesday. As a compromise, the Sri Lankan government will allow the development of the West Container Terminal (WCT) by India and its partners.
Reacting to the developments, a spokesperson for the Indian High Commission called for the “expeditious implementation” of the trilateral agreement of 2019. The spokesperson pointed to a decision by Sri Lanka’s cabinet three months ago to implement the project with foreign investors.
“All sides should continue to abide by the existing understandings and commitment,” the commission said in a statement.
The spokesperson added: “I would like to reiterate the expectation of government of India for expeditious implementation of the trilateral Memorandum of Cooperation (MOC) signed in May 2019 among the governments of India, Japan and Sri Lanka for the development of ECT with participation from these three countries.
Sri Lanka’s industries minister Wimal Weerawansa said the ten parties in the ruling coalition that are against handing over the ECT to an Indian investor would not oppose the development of the WCT by foreign firms.
