ECONOMYEXT – Sri Lanka is seeking an investor to complete the East Container Terminal of the Colombo Port and a report from a technical committee is awaited, Ports and Shipping Minister Rohitha Abeygunawardena said.
He said 440 metres of the 1320 metre East Container Terminal had been built by Sri Lanka Ports Authority. Four years ago it was estimated that 590 million dollars would be needed to complete it.
“We have to complete this terminal by 2022,” Minister Abeygunawardena told parliament. “If we don’t, we will face the challenge of companies that are doing business with our hub moving elsewhere.”
“So we have called for investors for 500 million dollars. We have a debt problem. Our policy is not to take debt. We are calling an investor. The ownership of the jetty will remain with the Sri Lanka government.
“An investor can come. He can spend 600 million dollar. He will have to earn it. That is the economic process of the world.”
He was responding to a question by Janatha Vimukthi Peramuna legislator Anura Dissanayake whether Adani group of India will be given a 51 stake in a terminal company.
Dissanayake suggested that a cabinet paper by Minister Abeygunewardene had proposed that 51 percent be given to an Indian company and 29 percent retained with Sri Lanka Port Authority.
Under terminal concession, a jetty is typically leased for 25 to 40 years under a build operate transfer agreement, with royalties and revenues shares to come.
Abeygunawardena said 370 million dollars in revenues had been earned from CICT terminal and only 100,000 dollars a year from Hambantota port.
Prime Minister Mahinda Rajapaksa said on 2017.04.26 an agreement was signed by Ministry of Development Strategies and International Trade with the Government of India without involving the Ports and Shipping Ministry.
On 2019.05.28 an agreement was signed with India and Japan.
Minister Abeygunewardene said a memorandum of co-operation was an inter-governmental agreement.
There was also no lapsing date for the deal, he said.
Abeygunewardene said work on the West Container Terminal would also begin this year, without taking debt.
Dissanayake queried whether the Sri Lanka Ports Authority could not complete the terminal as and engineers union had proposed that another 200 metres of the terminal be built to be able to accommodate two ships and complete the balance from the revenues.
Under the plan the East Terminal would be complete only in 2035, Minister Abeygunesekera.
Abeygunesekera said the last administration had cancelled an order for cranes to operate the first section of the terminal. As a result the terminal had remained idle.
Prime Minister Rajapaksa said no decision had been take so far to hand-over the ECT to any company fully or partially. (Colombo/Jan06/2020)