India, Japan & Sri Lanka sign MoC to develop ECT

India, Japan & Sri Lanka sign MoC to develop ECT

The governments of India, Japan, and Sri Lanka, through a tripartite agreement, have decided to develop a container terminal at Port of Colombo.

A Memorandum of Cooperation (MoC) was signed in Colombo by Sri Lankan Port Minister Salaga Ratnayake, Indian High Commissioner to Sri Lanka Taranjit Singh Sandhu, and Japanese delegate to develop East Container Terminal (ECT).

According to media reports, the new container terminal is located at the recently developed south part of Post of Colombo and will enable the related countries to develop a facility for large container ships.

After getting approval from the Sri Lankan cabinet, the three countries will set up a company to operate the terminal.

The cost of developing the container terminal is estimated around $500-700 million and is owned by Sri Lanka Port Authority holding 51% majority stake and rest 49% jointly by India and Japan. Japan is going to provide a soft loan at an interest rate of 0.1% for the duration of 40 years with a grace period of 10 years.

Participation of India and Japan in the development of Sri Lanka’s container terminal is being seen as strategic development as more than 70% of India’s transshipment is handled at Colombo ports. Moreover, it’s going to neutralize the growing Chinese influence over the island nation in which the country has poured money under its Belt and Road Initiative (BRI) plan.

This new East Container Terminal will be developed next to $500 million Colombo International Container Terminal whose majority 85% stake is owned by China and rest 15% by Sri Lanka’s SLPA.