Sri Lanka, India finalising MOU for KKS Port renovation
The Morning: The Sri Lankan and Indian Governments are presently finalising a Memorandum of Understanding (MOU) for the renovation and subsequent operation of the Kankesanthurai (KKS) Port, the Sri Lanka Ports Authority (SLPA) reveals.
Speaking to The Sunday Morning Business, SLPA Chairman Admiral (Retd) Sirimevan Ranasinghe stated that it was necessary to carry out extensive renovations at the Kankesanthurai Port prior to the commencement of operations.
Accordingly, he revealed that the Sri Lankan and Indian Governments were engaged in discussions at present to finalise the terms of an MOU for the renovation and subsequent operation of the Kankesanthurai Port.
“An MOU is being studied between the Sri Lankan and Indian Governments. The Kankesanthurai Port requires many developments and the port has to be renovated prior to the commencement of operations. Therefore, this MOU is for the renovation and subsequent operations of the port,” he stated.
However, the SLPA Chairman refused to provide any further specifics regarding the matter, claiming that it was not appropriate to comment on the matter considering that both Governments were presently engaged in discussions to that end.
Nevertheless, responding to a question posed by The Sunday Morning Business, he admitted that the renovation of the Kankesanthurai Port would be funded by a $ 62 million grant provided by the Indian Government.
Addressing how the operations of the port would be carried out, he stated that no decision had been made yet with regard to the exact modalities of its operations, adding that it was too premature to comment.
The previous Government in 2020 decided to position the KKS Port as a main commercial port in Sri Lanka, announcing that the development of the port would be carried out using financial assistance from India. Sri Lanka’s Ministry of Finance and the Export-Import (Exim) Bank of India signed an agreement in this regard in January 2018.
OSL take:
Sri Lanka’s close proximity to India has resulted in the two countries sharing strong bilateral and trade ties through the years. The trade ties have been further strengthened by an operational free trade agreement (FTA) between the two countries, which are also facing more strengthening through the proposed ETCA. India, which has one of the fastest growing economies in the world, is also a key development partner of Sri Lanka. All these connections have resulted in expanding air and sea connectivity between Sri Lanka and India with Sri Lanka’s northern province playing a key role in this aspect. It is in such a backdrop that Sri Lanka and India are looking at renovating the KKS Port in the North, which could result in an expansion in business and trade transactions between the two countries. All these close ties have also resulted in many Indian businesses setting up operations in Sri Lanka and the growth and profits recorded by these businesses could serve to boost confidence of other Indian businesses/investors to explore the expanding business/investment opportunities in Sri Lanka as the country’s economy is showing a steady growth. Also, other foreign businesses/investors on the lookout for opportunities in the South Asian region and interested in doing business with India could look at setting up bases in Sri Lanka to engage with India using the preferential treatment enjoyed by Sri Lanka in India as well as other countries in the region.
| Article Code : | VBS/AT/20250326/Z_1 |