Sri Lanka to look for an investor to complete East Container Terminal of the Colombo Port
Sri Lanka’s Ports and Shipping Minister Rohitha Abeygunawardena has reportedly said the country is looking for an investor to complete the East Container Terminal (ECT) of the Colombo Port and a report from a technical committee is awaited.
The Minister has been quoted as saying that 440 meters of the 1,320 meter ECT had been built by the Sri Lanka Ports Authority (SLPA and four years ago it was estimated that 590 million dollars would be needed to complete it.
“We have to complete this terminal by 2022,” Abeygunawardena has told parliament recently. “If we don’t, we will face the challenge of companies that are doing business with our hub moving elsewhere.”
“So we have called for investors for US$ 500 million. We have a debt problem. Our policy is not to take debt. We are calling an investor. The ownership of the jetty will remain with the Sri Lanka government.
“An investor can come. He can spend 600 million dollar. He will have to earn it. That is the economic process of the world.”
The Minister had made these observations in response to a question posed by opposition Janatha Vimukthi Peramuna parliamentarian Anura Kumara Dissanayake whether the Adani group of India will be given a 51% stake in a terminal company.
Dissanayake has pointed out to a cabinet paper by Minister Abeygunewardene that had proposed 51 percent of the ECT be given to an Indian company and 29 percent retained with SLPA.
Under terminal concession, a jetty is typically leased for 25 to 40 years under a build operate transfer agreement, with royalties and revenues shares to come.
Abeygunawardena has said that US$ 370 million in revenues had been earned from CICT terminal and only US$ 100,000 a year from Hambantota port.
Sri Lanka’s Prime Minister Mahinda Rajapaksa has been quoted in the local media as saying that on 2017.04.26 an agreement was signed by the then Ministry of Development Strategies and International Trade with the Government of India without involving the Ports and Shipping Ministry.
OSL take:
Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have helped it become a maritime hub in the South Asian region. This has expanded the business/investment opportunities in Sri Lanka’s ports, shipping and maritime sectors. The expansion of port facilities play a key role in the development/uplifting of the country’s maritime sector. Foreign businesses/investors could therefore explore opportunities in Sri Lanka’s maritime sector.
| Article Code : | VBS/AT/20210113/Z_2 |