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Sri Lankan government says the Colombo East terminal will be developed by the Sri Lankan Port Authority

The delay in developing the Colombo Port East Terminal has led to a loss of Rs 3.5 billion to the Sri Lanka Ports Authority (SLPA), Ports and Shipping Minister Mahinda Samarasinghe told the Sri Lankan Parliament on November 28 according to Sri Lankan Media reports.

According to reports in the island's media a few months ago, Colombo Port's East Terminal will be handed over to the Container Corporation of India for development as part of the island nation's balancing act of having given the CICT terminal to the Chinese Company. Shipping Minister Nitin Gadkari confirmed the move when he came to Chennai to inaugurate the Adani container terminal at Kamarajar port Ennore

Minister Samarasinghe revealed this, speaking at the committee stage debate on Budget 2018, when the Finance Heads of his ministry were taken up. He opposed a budget proposal to fully open up the Shipping Agency business to foreign companies.

As of now large ships can only enter the CICT terminal of the Colombo Port operated by a private Chinese firm. If the East Terminal facility is developed the SLPA could boost its revenue. The previous government called for tenders to import necessary machinery to develop the East Terminal and the tender was ready to be awarded. However, the interim government (Jan. to Aug. 2015) called it off. "Had we proceeded with the tender, the East Terminal would have been competing with the CICT terminal run by a Chinese company by now.

The Sri Lankan Port Authority has incurred a loss of Rs. 3.5 billion due to the failure to develop the East terminal." "We can no longer bear this loss. The SLPA depends heavily on the East Terminal. We will soon start developing it with Cabinet approval. President Maithripala Sirisena, at a public meeting, recently assured that the East Terminal would continue to be under the SLPA."

Commenting on the Hambantota Port Joint Venture, the minister said the Treasury had agreed to allocate money for settling the portís massive debts.  A sum of 1500 million US dollars was borrowed from Chinese company to construct the Hambantota Port. Last year, Rs. 10 billion out of the SLPA profit was spent on debt servicing. As a result last year our profit dropped to Rs. 1 billion. This year Rs. 12 billion is needed to service debt. The Treasury took over the debt payment following the joint venture agreement. Therefore, we have been able to raise our profit to Rs 11 billion."


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