China-India tussle for Eastern Container Terminal

Colombo Port’s Eastern Container Terminal (ECT) development project has been stalled since 2016 due to inconsistent policy decisions taken by the government from time to time amidst intervention of the President in awarding the contract to a suitable bidder among multiple consortiums who have made expressions of interest (EOI).

Multiple consortiums representing India- Japan, China-Qatar -Iran along with the Sri Lanka Ports Authority have already expressed interest to develop the ECT as the deepest Container Terminal at the Port of Colombo helping to berth massive ships, container carriers and oil tankers, official sources said.

The stat e - run Container Corporation of India (Concor) has formed a consortium with APM Terminals BV, John Keells Holdings and Maersk Line to bid for the ECT development in Colombo in 2017. The total project value will be around $550600 million.

A Memorandum of Understanding (MOU) had been signed on the ECT with this Indian –Japanese and Sri Lankan consortium to develop the ECT in the same year.

This was the result of an assurance given by the Government especially Prime Minister Ranil Wickremesinghe that the East Terminal will have an Indian investor/party so as to balance off any regional concerns over Chinese presence in Hambantota Port.

But President Maithripala Sirisena told the gathering at Sri Lanka Ports Authority’s 38th anniversary ceremony recently that Colombo Port’s East Terminal will not be privatised or developed via Public Private Partnership. It will remain with the Sri Lanka Ports Authority despite an on-going exercise for non-state involvement.

He assured that the East Terminal will not be handed over to any other party and insisted that it should be vested in the Ports Authority.

Heeding the President’s protest at that time, the Government has convinced the Indian government to abandon the project as it needs to maintain the ECT under the Sri Lanka Ports Authority (SLPA), a senior official who was involved in the project negotiations said.

After concluding a visit to Iran in August 2018, the President took meas- ures in October 26 to remove the incumbent Prime Minister Ranil Wickremesinghe and his cabinet and appointed MP Mahinda Rajapaksa as the premier creating a political impasse in the country that lasted 52 days. Mr. Wickremesinghe was eventually reinstated.

A cabinet paper was presented during this period to hand over the ECT modernisation project to Shanghai Zhenhua Heavy Industries Company (ZPMC).

This deal to replace the India-Japan consortium and bring a Chinese company with links to Qatar and Iran had been worked out to take over ECT with a 1200m long quay wall, 18m deep berthing three mega ships at a time.