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India and Japan to develop WCT

03 Mar 2021

  • 35 Year BOT Agreement

  • Only JVP unions to oppose

The Cabinet of Ministers has approved the development of the West Container Terminal (WCT) of the Colombo Port as a public private partnership between companies nominated by the Indian and Japanese Governments and the Sri Lanka Ports Authority (SLPA). The decision came on Monday (2), exactly a month after Colombo pulled out of the 2019 tripartite agreement with India and Japan to jointly develop the East Container Terminal (ECT) of the Colombo Port. The Terminal will be developed on a 35-year Build, Operate, and Transfer (BOT) basis and the BOT plan approved by the Cabinet-appointed negotiation committee has been forwarded to both the High Commission of India and the Embassy of Japan to nominate investors. However, the exact shareholding between the three parties is yet to be announced. It is widely expected that an 85% share will go to the foreign companies, with 15% remaining with SLPA. The shareholding could be split this way to allow India and Japan to match the shareholding that China has in the nearby Colombo International Container Terminals (CICT), where China’s state-owned China Merchant Port Holdings (CMPH) enjoys an 85% 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. As expected, the Indian Government has nominated India’s Adani Ports and Special Economic Zone Limited (APSEZ Consortium) for the project, along with its local representative John Keells Holdings PLC. However, no investor has been named by the Japanese Government yet. At the time of going to press, the Japanese Embassy had not responded to a query made by The Morning in this regard. The Cabinet appointed negotiation committee presented their recommendations based on the discussions held with the two parties and the Cabinet thereby approved the proposal put forward by the Ports Minister. Meanwhile, the Janatha Vimukthi Peramuna (JVP) opposed the move concerning the WCT. Speaking to The Morning, JVP Politburo Member and the Chairman of the National Trade Union Centre, K.D. Lal Kantha said that the Party and unions would take action against this decision. “We hope to have a discussion with the parties opposed to the WCT decision and to take joint action against this.“ According to Lal Kantha, they totally disagree with privatising and selling Government and public assets, which he claimed has become a policy of the current Government.  “We say that we are capable of developing this Port on our own and also paying off the loans which we obtained from other countries,” he further claimed. Speaking to us, the National Organiser of the Samagi Jana Balawegaya Parliamentarian Tissa Attanayake said that the Party will be giving their decision on the WCT following a committee meeting which was scheduled to be held yesterday (2). The Sri Lankan Government changed its plan to offer a 49% stake in the ECT of the Colombo Port to India, specifically the Adani Group, reneging on a tripartite agreement signed with India and Japan in 2019. The Indian Government has not taken kindly to this about turn by the Sri Lankan Government, and has said so in no uncertain terms that it wants the latter to abide by the agreement. The decision to backtrack on the agreement was due to intense and vocal opposition from trade unions both within and outside the Colombo Port, especially by those unions who had supported the Government during both the Presidential and General Elections. These trade unions called off the planned work to rule campaigns and further protests following the approval by the Cabinet for 100% ownership of the ECT to remain with the SLPA. However, the handing over of the WCT for a joint development to India and Japan was agreed upon by the trade unions excluding those affiliated to the JVP in a letter sent to the President. In the letter written to the President on 29 January, the unions had assured that they would withdraw from all union action if six conditions were met. These included the handing over of the already completed section of the ECT to the SLPA, completing the construction work of the Terminal with SLPA funds, completing the construction within three years, and acquiring control of the South Asia Gateway Terminal (SAGT) after the already-existing agreement expires in 2029. If fulfilled, the unions agreed to support the Government for the development mechanisms of the WCT, to get Cabinet approval to take complete ownership of the ECT under the SLPA, and to get approval for both the WCT and the ECT in the same Cabinet approval process. The WCT is among one of the three Terminals at the Colombo Port along with the South Container Terminal (SCT) and the ECT. Each Terminal is 1,200 metres in length and possesses facilities to accommodate three berths each.


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