Japan on Wednesday said it was “regrettable” that the Sri Lankan government had opted to hand over the operations of a key port terminal in Colombo to a state-run body instead of sticking to a trilateral agreement involving India for the development of the facility.
The position taken by Japan endorsed India’s stance on the development of the East Container Terminal (ECT) of Colombo port. New Delhi had on Tuesday asked Colombo to abide by the agreement signed by the three countries in 2019.
The Sri Lankan government gave in to pressure from labour unions, which opposed a joint venture with Indian and Japanese investors having a 49% stake in the ECT, and the cabinet decided on Monday to run the facility as a fully owned operation of the Sri Lanka Port Authority (SLPA).
“It is regrettable that the government of Sri Lanka unilaterally made a cabinet decision and announced the development and operation of ECT as a wholly owned container terminal of Sri Lanka Ports Authority,” said an official of the Japanese embassy in New Delhi.
“We are aware of the cabinet decision by the government of Sri Lanka and looking into the details,” the official said.
{{/usCountry}}“We are aware of the cabinet decision by the government of Sri Lanka and looking into the details,” the official said.
{{/usCountry}}Japan, India and Sri Lanka “have been discussing the details about the cooperation on ECT” since the three countries signed a memorandum of cooperation (MOC) for developing the terminal in May 2019, the official added.
The reaction from the Japanese side came a day after Indian high commissioner Gopal Baglay held separate meetings with President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa and foreign minister Dinesh Gunawerdene in Colombo to convey India’s position that the Sri Lanka must abide by the trilateral agreement, people familiar with developments said on condition of anonymity.
India’s Adani Group and several Japanese investors were to form a joint venture to hold 49% stake in the ECT, with the majority stake in the hands of SLPA. The Indian side also made it clear to the Sri Lanka side that the latest decision on ECT could affect investor confidence, the people said.
The Indian high commission in Colombo has called for the “expeditious implementation” of the trilateral agreement and said: “All sides should continue to abide by the existing understandings and commitment.”
The Sri Lankan government has said it will allow the development of the West Container Terminal (WCT) by India and its partners.
The agreement for the port terminal was signed by the previous government of president Maithripala Sirisena and has been in trouble since he was voted out of power in 2019. A group of 23 labour unions in Sri Lanka have demanded that ECT should be a 100% government entity. They also described a planned deal with the Adani Group as a sell-out.
In a meeting with labour unions on Monday, Prime Minister Rajapaksa said he had announced 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.