GS-PAPER II- IAS MAINS- International Relations -Sri Lanka, Japan and India signed an agreement to jointly develop the East Container Terminal at the Colombo Port.

Context:

Sri Lanka, Japan and India signed an agreement to jointly develop the East Container Terminal at the Colombo Port.

Details:

• The joint initiative is estimated to cost between $500 million and $700 million.
• As per the agreement signed the Sri Lanka Ports Authority (SLPA) retains 100% ownership of the East Container Terminal (ECT), while the Terminal Operations Company, conducting its operations, is jointly owned, the SLPA said in a statement.
• Sri Lanka will hold a 51 per cent-stake in the project and the joint venture partners will retain 49%.
• Japan is likely to provide a 40-year soft loan with a 0.1 percent interest rate.
• Japan also had helped development of the Jaya Container Terminal at the Colombo Port, supporting its operations since the 1980s.

Significance:

• The signing of the Memorandum of Cooperation (MoC) is significant, given that the countries had been negotiating the deal since last year, with little success.
• Last year, India’s possible role in developing the terminal had become a major flashpoint within the government.
• President Maithripala Sirisena had opposed any Indian involvement in the project, as roping in foreign actors for developing “national assets” remains a politically sensitive call in the island, especially among nationalist trade unions.
• India and the United States are both concerned that a Chinese foothold at Hambantota, south of Colombo, could give it a military naval advantage in the Indian Ocean.
• Sri Lanka has insisted that its ports will not be used for any military purposes.
• The ECT for which India has now entered into an agreement is located 3 km away from the China-backed international financial city, known popularly as “port city”, being built on reclaimed land on Colombo’s sea front.

Q: What are the benefits of developing East Container Port in Sri Lanka by India in Joint Venture ? How can this port be compared with the Chinese presence at the port city and the Hambantotat Port ? 

Courtesy : byju.com