The government is gearing to fast-track the development of East Container Terminal (ECT) at the Port of Colombo jointly with Japan and India with the setting up of a terminal operating company (TOC), ensuring that the full ownership of ECT will remain with Sri Lanka.
According to informed government sources, Sri Lanka Ports Authority (SLPA) will own 51 percent equity stake in the TOC while parties nominated by Japanese and Indian governments will collectively hold the remaining 49 percent.
The three governments involved in the project are expected to sign a memorandum of understanding (MOU) in the coming months. Thereafter, a joint working group consisting of members of the three governments, is expected to negotiate the ‘duration of co-operation’ of the TOC.
A Cabinet memorandum in this regard is also expected to be presented by the Ports and Shipping Minister Sagala Ratnayake to the Cabinet of Ministers next week.
Meanwhile, diplomatic sources said the Japanese government is likely to extend a concessional loan to the Sri Lankan government to the tune of US $ 500 million to develop the ECT, which is to be paid back in 40 years with a grace period of 10 years.
The tug of war between President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe had significantly delayed the development of ECT.
President Sirisena had reportedly opposed any move to get private sector involvement in the development of ECT, even in the form of a public private partnership (PPP) deal.
The government in late 2016 called for Expressions of Interest (EoI) for the development of the ECT, and seven parties submitted applications. However, the development contract was never offered to any of the parties due to disagreements between Sirisena and Wickremesinghe.
The ECT’s first phase was completed in 2015 with a US$ 80 million loan from Bank of Ceylon (BOC). A part of the terminal is equipped with a 440 metre quay berth and an 18 hectare yard in addition to other equipment.
The ECT is located at the newly expanded south part of Port of Colombo.