Diplomatic tussle for ECT continues
The government on Friday agreed to install three Chinese cranes at the East Container Terminal (ECT) of the Colombo Port to defuse tensions caused by protesting trade unions during the week but fell short of allowing these to be commissioned.
This decision was made in the backdrop of diplomatic discussions underway on rearranging an agreement to run this terminal made about a year back.
Prime Minister Mahinda Rajapaksa called for a meeting with protesting trade unions that included government TUs at his Carlton – Tangalle residence where following discussions he conveyed President Gotabaya Rajapaksa’s order to discharge the cranes and install them at the ECT.
The cranes needed to be discharged somewhere as the vessel operator from China had indicated in a letter to authorities that it has to leave the Colombo Port by July 5.
But commissioning of these cranes will not take place rendering the terminal inoperable as authorities have indicated to the TUs that cabinet approval need to be sought following further discussions at the cabinet level.
Moreover, it is learnt the government is also likely to make an announcement at the SLPA’s 40th anniversary on August 1 that the terminal will be run by Sri Lanka alone instead of the earlier planned tripartite arrangement with India and Japan.
India has continuously insisted Sri Lanka fast-track this project during Indian Prime Minister Narendra Modi’s meeting with President Rajapaksa last year and then again in May this year during the video conference during the COVID-19 pandemic.
India and Japan that are party to the Memorandum of Cooperation (MOC) are learnt to have exerted pressure on the government not to install these cranes at the ECT as per the agreement.
The cranes, imported from China, came under an arrangement by the previous government during former Ports Minister Sagala Ratnayaka’s tenure to install these for expansion of the Jaya Container Terminal (JCT) 5.
Meanwhile, the Japanese Embassy in Colombo in a query made by the Business Times stated that they are still a part of the tripartite agreement signed in May 2019.
“Japan is prepared to contribute to the earliest realization of the development and operation of the ECT through the tripartite cooperation. The details of the cooperation are under consultation among the Governments of Japan, India and Sri Lanka, and are yet to be finalized,” the embassy said.
As part of the MOC, the SLPA was to retain 100 per cent ownership of the ECT, but the company that conducts all of its operations was to be jointly owned between Sri Lanka – 51 per cent – and the remaining 49 per cent being split between India and Japan with the latter’s contribution being in the form of a loan to purchase the cranes and other equipment.
Now however it is learnt that the government has requested Japan to become an investment partner in the agreement, a move which Japan is not in favour with.
This has caused some concern and SLPA sources opine that the authorities are likely to move out Japan from the agreement since the government has indicated that they do not have sufficient finances to cough up for a loan to buy cranes for the ECT.
Meanwhile, India is said to finalise its partner company to run the operations of the terminal. But it has been revealed that Adani Ports (which intends joining John Keells Holdings – JKH) to operate the terminal) is developing the proposed Vizhinjam International Deepwater Multipurpose Seaport Project in Kerala which in such case would be acting in competition to the Colombo Port.
In this respect Adani Port coming into the ECT would not be beneficial for Sri Lanka since the Vizhinjam port is also being developed as a regional transhipment hub, sources said.