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East Container Terminal: Trilateral talks ongoing: Japan 

24 Jan 2021

  • GoSL 51%, India 49%, Japan 0%: Port TUs allege 

  The Government is attempting to hand over the entirety of the 49% of shares allocated for foreign investment in the East Container Terminal (ECT) at the Colombo Port to India, by abandoning Japan, trade unions (TUs) attached to the Sri Lanka Ports Authority (SLPA) alleged. Meanwhile, the Japanese Embassy in Colombo maintained that trilateral discussions were still ongoing.   Port TUs alleged that the sudden urgency shown by the Government to expedite the ECT deal was because they wanted to secure a loan amounting to $ 1 billion.  By September of this year, the Government has to pay around $ 5 billion as an instalment for the loans obtained by Sri Lanka in this regard, Deputy General Secretary of the All-Ceylon General Ports Employees’ Union (ACGPEU), which is affiliated to the Janatha Vimukthi Peramuna (JVP), G. Niroshan claimed while speaking to The Sunday Morning.  He also claimed that since the Government did not have sufficient foreign reserves to pay the said loan instalment, they are expediting the ECT deal in order to secure the loan from India.  “There is no Japanese involvement at all now, as the old Memorandum of Co-operation (MoC) is no longer valid. In the earlier MoC, it was stated that there would be a loan from Japan. In the new documents, there is no mention of a Japanese yen loan. It means that Japan is out of the ECT development project and now it is only India that is involved,” he further claimed.  However, when contacted by The Sunday Morning, SLPA Chairman Gen. (Retd.) Daya Ratnayake said that within the said 49% of the shares opened up for foreign investments for the ECT, any party could submit proposals.  “It could either be Japan or any other interested party. They can discuss and come within the 49% of shares. The SLPA will hold 51% shares,” he said, stressing also that the investment proposal was not finalised.  However, he said that it was not possible to deviate from the MoC signed under the previous Government as Sri Lanka has already made a commitment.  “The President is looking at the issue in a nationalistic manner, considering all other national issues. We are looking for an investment of at least around $ 500 million,” he said.  Sri Lanka signed the said MoC for the development of the ECT with India and Japan, based on the discussions among the heads of governments during the period from 2017 to 2019 and on the cabinet decisions taken on 30 May 2019. The MoC provides for the formation of a Terminal Operations Company (TOC), of which 49% is jointly held by Japanese and Indian shareholders while 51% is held by the SLPA. In terms of the MoC, the TOC was to develop the ECT based on a Japanese loan to the SLPA, guaranteed by the Government of Japan.  Meanwhile, when queried by The Sunday Morning, the Embassy of Japan said that Japan, India, and Sri Lanka are currently conducting discussions to finalise the details of co-operation so as to realise the development and operation of the ECT.  These allegations by the trade unions have been levelled against the Government in a backdrop where the ties between Japan and Sri Lanka were questioned following the cancellation of the controversial Light Rail Transit (LRT) project by the Cabinet last year, claiming that it was costly.   In a letter written to the Director General of the External Resources Department (ERD) of the Ministry of Finance, Economic, and Policy Development on 7 May 2020, seen by The Sunday Morning, the Japan International Co-operation Agency (JICA) has said that the Government of Japan would temporarily hold the formulation process regarding the appraisal stage of the Greater Colombo Transmission and Distribution Loss Reduction Project Phase II.  The letter, which was signed by JICA South Asia Department South Asia Division 3 Director Naoaki Miyata, has stated: “We regret to say that the Government of Japan will not give clearance for proceeding with the project to the appraisal stage until the above-mentioned situations are improved.”  However, replying to a query made in this regard by The Sunday Morning, the Japanese Embassy in Colombo noted that they believe that they are making good progress with the co-operation of the Government of Sri Lanka on projects including the “Kalu Ganga Water Supply Expansion Project”, the “Anuradhapura North Water Supply Project”, the “Bandaranaike International Airport Development Project”, the “New Bridge Construction Project over the Kelani River”, and other such projects.   


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