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Colombo’s East Terminal ownership will remain with us but Japan and India will do the development

The Sri Lankan Minister of Ports and Shipping Sagala Ratnayaka at a recent inspection tour of the Sri Lanka Ports Authority , emphasized the importance of expanding Colombo Port’s capacity to ensure Port’s sustainable growth.

In a recent statement the Sri Lanka Ports Authority (SLPA) said the envisaged partnership with Japan and India to develop the East Container Terminal (ECT) will help Port of Colombo to continue with its growth momentum and further improve its position.

Though 3 countries sign MoC, ECT will remain with Sri Lanka

The three governments are expected to sign a Memorandum of Cooperation (MOC) over ECT, through which SLPA asserted the 100 percent ECT ownership will be retained with Sri Lanka.

A Terminal Operations Company (TOC) is said to be formed to conduct ETC operations which will be jointly owned where Sri Lanka will retain 51 percent and the joint venture partners will purchase 49 percent stake.

SLPA going ahead to speed up the operationalization of ECT is indeed heartening news to the maritime industry stakeholders in Sri Lanka. CASA had been stressing the need of adding capacity at a brisk pace in order to retain Sri Lanka’s position as the best connectivity port in South Asia.

Port of Colombo recorded a 13.5 per cent growth for the year 2018 over the same period of the previous year, reaching 22nd from the position of 23rd amongst global container ports, according to Alphaliner Monthly.

First time Colombo Port topped global maritime ranking

It is also a significant achievement as it is the first time in history that the Port of Colombo has topped a global maritime ranking. With this growth, the Port of Colombo has leapt ahead many other Asian, Middle Eastern and European Ports.

If this growth momentum continues we can assume that all the terminals in Colombo will reach full capacity and therefore adding capacity at a brisk pace is the most crucial factor for Sri Lanka to retain its position as the best connectivity port in South Asia.

Immediate measures should therefore be taken to operationalize the East Container Terminal (ECT) which is designed as a deep water terminal. It is disappointing that no strategic decisions pertaining to the expansion of the Colombo Port’s capacity was made during the last few years despite the industry highlighting the urgency.

The proposed arrangement made by SLPA is in indeed encouraging as the Ports Authority will retain control over the East Container Terminal whilst the foreign investment will expedite the operationalization of the terminal.

Second deep water terminal, must for Colombo to face the regional competitors

A second deep water terminal is a must for Colombo as we are facing the risk of losing cargo for regional competitors. As Sri Lanka gears up to become a regional hub, many other countries are turning to port development to accommodate growing volumes.   

India, for instance, has launched the Sagarmala initiative, a 126 billion US dollar Port-led development project designed to address India’s capacity constraints. Therefore this joint venture will bring the much needed investment for ECT whilst retaining the control with the state owned SLPA promoting the national interest of Sri Lanka.

 

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