Table of Contents
SRI LANKA HAS SIGNED A TRIPARTITE AGREEMENT
- Sri Lanka has signed a tripartite agreement with India and Japan for development of eastern terminal of Colombo port.
- The Memorandum of Cooperation (MoC) was signed in Colombo on Tuesday by Sri Lankan ports minister Sagala Ratnayake, Indian high commissioner to Sri Lanka Taranjit Singh Sandhu and a Japanese representative.
NOTES
- As per the agreement, Sri Lanka Port Authority (SLPA) will hold 51 percent majority stake in the port development while Japan and India will have combined stake of 49 percent.
- The three governments have decided to work out details at joint working group meetings and advance their cooperation towards early commencement of work and operation of the terminal.
NOTES
- Sri Lanka, Japan and India will work together for further development of the Colombo Port and contribute to further regional prosperity and stability of global trading networks.
- The deal is significant as over 70% of India’s transhipment business is handled at Colombo ports. One of the terminals is controlled by Chinese company and there was a long pending proposal to handover the development of Eastern terminal to an Indian company. The deal is part of Memorandum of economic cooperation signed between India and Sri Lanka in 2017.
NOTES
- Development comes even as China has been trying to increase its influence in South Asia especially with the development of ports like Gwadar in Pakistan and Hambantota port in Sri Lanka. In 2017, unable to pay its debts, Sri Lanka handed over Hambantota to China for a 99 year period lease.
WHAT WOULD BE THE COST OF THE PROJECT
- Quoting sources close to the Indian High Commission, Reuters reported that a framework for the terminal project will be “signed soon” and that the project would cost about $500 million.
WHAT IS THE STRATEGIC IMPORTANCE?
- The Port of Colombo has attracted major investment from China under its Belt and Road Initiative (BRI).
- The terminal will be built next to a controversial $500- million terminal called the Colombo International Container Terminal (CICT), 85 percent of which is owned by China and 15 percent by the SLPA.
DETAILS
- “Japan is likely to provide a 40-year soft loan with a 0.1 percent interest rate,” said Sudarshana Gunawardana, Director of Development Communications at the Prime Minister’s office. The SLPA described the “envisaged Japanese loan” as “one of the best loan terms Sri Lanka has obtained”.
PORT OF COLOMBO
- Colombo Harbour is one of the busiest ports in the world, and ranks among the top 25 ports he port is also the naval base for Sri Lanka Navy Western Fleet under the Commander Western Naval Area (COMWEST)
Latest Burning Issues | Free PDF
WhatsApp