- Sri Lanka’s decision to back down from ECT agreement
Indian High Commissioner Gopal Baglay met with President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa and Foreign Minister Dinesh Gunawardena on Tuesday, to discuss the fate of the Eastern container Terminal (ECT) according to The Hindu.
A series of meetings took place in Colombo following Sri Lanka’s decision to back down from the original Memorandum of Cooperation (MoC) signed in May 2019. .
The thrust of the Indian envoy’s message to the Sri Lankan leadership, according to the Hindu newspaper was that Colombo must adhere to its commitments in the tripartite agreement of May 2019, to jointly develop the strategic terminal with the Sri Lanka Ports Authority (SLPA) holding a 51% stake and India and Japan holding 49% together.
The Adani Group from India, along with Japanese companies, was to invest in the project expected to cost up to $700 million, as per official estimates.
The Indian side, it is learnt, conveyed that the signals emanating from Sri Lanka should boost the confidence of potential investors. President Gotabaya Rajapaksa has pledged to draw foreign direct investments to the country, rather than take loans.
The three high-level meetings follow the Sri Lankan government’s cabinet decision, in the wake of raging protests by port workers’ unions opposed to foreign investment in the facility, that the operation of the ECT would be“100%”with the SLPA, while the West Container Terminal would be offered to India instead, on a 35-year arrangement for development. The Hindu said
The Hindu report further states that this is the second instance of Sri Lanka reversing an agreement on a large infrastructure project involving Japan, after the government scrapped the $1.5 billion, Japan-funded Light Rail Transit system last year.
The development has sparked alarm in India and Japan, according to diplomatic sources, who said Sri Lanka had neither conveyed its decision, nor offered the alternative proposal to either of the partners.
Asked how Sri Lanka would mobilise funds to develop the SLPA, especially after the economic impact of the pandemic, Udaya Gammanpila, a Cabinet spokesman, on Tuesday said, “SLPA is going to use its own funds, as well as borrow money from local commercial banks.”
On whether Sri Lanka had discussed the option of developing the West Container Terminal with India, he said, “This is a sensitive diplomatic issue. Sri Lanka is always keen to maintain cordial diplomatic ties with India. Sri Lanka has commenced discussions with the Government of India, but I don’t think this is the stage to disclose those details.”
While the ECT, which is in its first stage and awaits upgrade, has a 450-metre-long quay wall and water depth of 18 metres, equipping it to accommodate large vessels, the West Container Terminal (WCT) exists merely as a proposal, with no infrastructure yet.