Sri Lanka Ports Authority (SLPA) said yesterday the new revival deal for the long-prolonged East Container Terminal (ECT) will boost the Colombo port in retaining its hub and competitive status.
In a State-level deal, the Government is to sign a Memorandum of Co-operation (MoC) with Japan and India for ECT. The SLPA will retain 100% ownership of the ECT and the Terminal Operations Company (TOC) will be jointly owned with Sri Lanka retaining the controlling 51% stake, and the joint venture partners holding the balance.
The deal also includes a Japanese loan which carries one of the best loan terms Sri Lanka has obtained. The 51% stake is also one of the best in SLPA joint ownership endeavours. SLPA’s majority ownership in the new TOC represents a significant step in prioritising national Interests while co-operating with international partners.
“These elements combined allow the Colombo Port to develop at a faster pace than would otherwise be feasible using SLPA’s own funds,” it said.
SLPA also said the global cargo trade is an extremely competitive, fast-paced, rapidly-evolving industry, that requires ports be timely in their capacity expansion, execution, and service levels. “The envisaged MoC is a significant step in ensuring the Colombo Port delivers on these goals in an agile manner,” it emphasised.
Currently, Colombo Port is ranked 11th in connectivity (Drewery, 2018) and 22nd among global ports (Alphaliner, 2018).These ranks were reached by SLPA owned Jaya Container Terminal (JCT) working in partnership with South Asia Gateway Terminals (SAGT) and Colombo International Container Terminals (CICT).SLPA’s ownership stake in SAGT and CICT terminal operators is 15%. Both of these partners have contributed extremely positively to Colombo Port achieving its current status.
SLPA believes the envisaged new partnership will help the Port of Colombo to continue growth and further improve its position.
Within the next three decades, over 45% of global GDP and trade is predicted to originate or be located within the Asian region. In this ultra-connected world, deep relationships with multiple trading partners is not only prudent business, it is critical to ensuing Colombo Port remains relevant to global trade.