COLOMBO: The Government of Sri Lanka (GoSL) is set to offer 85 per cent stake in the West Container Terminal of the Colombo Port to India in order to retain 100 per cent ownership of the East Container Terminal (ECT), The Morning has reliably learnt.
The shareholding has been split this way to allow India to match the shareholding that China has in Colombo International Container Terminals (CICT), where China’s state-owned China Merchant Port Holdings (CMPH) enjoys 85 per cent stake.
While the ECT is already built and developed, the West Container Terminal would need to be developed by India once it acquires it, in much the same way that CICT was developed by CMPH. The private company that would take over the West Container Terminal is believed to be the Adani Group, which is India’s largest port operator and the entity which has been linked to the ECT deal for months.
When we inquired from Co-Cabinet Spokesman and Mass Media Minister Keheliya Rambukwella about the plan to offer the West terminal instead of the ECT, he said that geopolitical realities cannot be avoided by any country. “When managing international relations, sometimes we need to take strategic political decisions. However, even that should be done in a way which doesn’t impinge on the nation’s sovereignty and security. Trade union leaders have urged us not to give away the ECT but that it would be all right to offer the West terminal for investment and development. Therefore, on principle, we are looking for an investor. However, this is a massive investment and will not be easy.”
However, when asked specifically about whether the shareholding would be 85 per cent-15 per cent in India’s favour, he said it had not been decided yet and that it has not even been decided that the investment would come from India.
He added that the recently appointed Cabinet Sub-committee to look into this matter will submit its report today and the Cabinet decision will be made today and announced tomorrow.
Meanwhile, State Minister of Urban Development, Coast Conservation, Waste Disposal, and Community Cleanliness Dr Nalaka Godahewa told The Morning yesterday that President Gotabaya Rajapaksa has agreed to a set of proposals which included a proposal that the West terminal of the Colombo harbour should be released for positive investments. The letter was sent to the President by the Trade Unions Collective to protect the ECT on Friday. “The President agreed to the proposal sent by the unions and approved it since the proposals suggest a similar vision to that highlighted in the President’s Vistas of Prosperity and Splendour policy outline regarding the ECT. Thus, we will not be giving the ECT to investors but we are looking at how investments can be brought into the West terminal.”
The proposals were as follows:
- The ECT’s constructed areas to be fully owned and operated by the Sri Lanka Ports Authority (SLPA)
- From the SLPA reserves of $ 250 million, invest $ 100 million in the aforementioned developed area of the ECT to be fully used for operations by the SLPA
- To complete the construction of the remaining areas of the ECT in three years under the SLPA and following the expiration of the SAGT (South Asia Gateway Terminals) agreements in 2029, that this terminal also be taken over and operated by the SLPA
- To agree to any future government initiatives to grant positive investments in the West Container Terminal
- To seek Cabinet approval for the ECT to be 100 per cent fully operated and managed by the SLPA
- To seek necessary Cabinet approval for the development of the ECT and the West terminal
According to Dr Godahewa, the President never justified the proposed deal on the ECT. The President had pointed out that it was the previous government that had signed a Memorandum of Understanding (MoU) with India on the subject and that the maximum the government would offer of the terminal is 49 per cent, he said.
When we contacted the President’s Media Division (PMD), we were told that no official statement has been released by the President on this matter yet and that our queries could not be answered at this time.
Ministry of Ports and Shipping Secretary U.D.C. Jayalal said the proposals of the trade unions are currently being studied by the Cabinet Sub-committee and the proposals submitted by the trade unions will be included in the report, which will be submitted to the Cabinet through Minister of Ports and Shipping Rohitha Abeygunawardena following extensive discussions. When asked about the President’s decision on agreeing to the trade unions’ proposal, he said he cannot comment on it.