ECT to be fully owned by SLPA | Daily News

ECT to be fully owned by SLPA

The strategic East Container Terminal of the Colombo Port-ECT inaugurating operations last year
The strategic East Container Terminal of the Colombo Port-ECT inaugurating operations last year

While the Government has its work cut out at Geneva having a raw deal on the table at the United Nations Human Rights Council (UNHRC), it was also in a tight corner domestically as the Trade Unions (TUs) and nationalist groups stepped up their pressure collectively on the Government against going ahead with the proposal to develop the East Container Terminal (ECT) of the Colombo Port as a joint venture with foreign public and private partners, primarily India’s Adani Group.

Both topics dominated the news cycle last week arousing public interest on their developments. Resolving the above issues has not been easy as their root causes are intertwined with global geopolitics. Hence, a lot of patience and manoeuvring have been required to find the right balance in the negotiations to hammer out an acceptable compromise.

All eyes were on this week’s Cabinet meeting, as the Cabinet paper regarding the ECT was presented by Ports Minister Rohitha Abeygunawardena. The joint movement by the TUs and nationalist forces reached a climax ahead of this decisive meeting on Monday. Ending weeks of consternation on the Eastern quay, the Cabinet of Ministers took a bold decision unanimously that it should be developed and operated retaining full ownership by the Sri Lanka Ports Authority (SLPA).

Taking a different approach, the Government has now come up with a fresh proposal to develop the Colombo Port’s Western Terminal (WCT) as a Public-Private Partnership (PPP) with India and Japan as the nominated partners. The proposal received the Cabinet nod on the same day.

Strategic Terminal

It is no secret that the matter of the ECT was not just about finding an investment partner to complete its halfway done development, but was essentially related to balancing relations between China and India.

The ECT is the second deep-water facility at the country’s busiest port located in the heart of the commercial Capital, the first being the ColomboInternational Container Terminal (CICT), in which China Merchants Port Holdings Company Limited has an 85 percent stake.

In the wake of China establishing a firm foothold in the Colombo and Hambantota Ports, India was seen as being impatient to push the deal for the joint venture of the ECT through. The preliminary agreement in this regard dated back to the previous Maithripala Sirisena–Ranil Wickremesinghe administration. The proposed ECT deal was that India and Japan could invest in 49 percent of shares while the SLPA was to retain 51 percent of shares and thus overall control.

Recently, India named the Adani Group of Companies, a large conglomerate with investments in domestic and foreign megaprojects as its stakeholder of the project. The topic of the ECT came up at bilateral talks between Indian External Affairs Minister Dr. S. Jaishankar and the Government higher ups he met in Colombo last month. He was incidentally the first foreign dignitary to visit Sri Lanka in the New Year.

In addition, the United States (US), which has built closer ties with India in the recent times to “counter growing Chinese presence in the Indo-Pacific Region,” was also keenly waiting to see India sealing the ECT deal with Sri Lanka. This was revealed last week when US Ambassador Alaina B. Teplitz, joining in a virtual meeting with a group of journalists, commented in favour of India’s bid in the ECT.

Pressure groups

Nevertheless, the incumbent Government found it difficult to see eye to eye with its own supportive groups inclined towards nationalist sentiments and the TUs of the Ports Authority when it tried to move ahead with the ECT joint investment project.

The TUs came up with a detailed proposal to develop the Eastern Jetty with SLPA funds. They pointed out that a Public-Private Partnership is not necessary for the purpose as the partially completed ECT is already making money from the operations which began since November last year.

They were also quick to point out that the Adani Group is a business empire with a chequered history and is implicated in various corruption allegations. The TUs also launched a work-to-rule campaign to win their demands. Against this backdrop, the President on Saturday extended his previous order making Ports an essential service.

A number of influential Buddhist monks, who put their shoulders to the wheel to bring about a political change that enabled President Gotabaya Rajapaksa and his Government to come to power including Ven. Elle Gunawansa Thera and Ven. Medagoda Abhayatissa Thera, came forward against the divestment proposal of the ECT.

They pointed out that the proposal runs contrary to the tenets of the Government led by President Rajapaksa, which came to power with a clear pledge of protecting national assets and keeping national interests at the heart of governance.

Over the past few weeks, the Government was squeezed between external pressure pushing the ECT deal through and counterpart pressure at home demanding to drop the proposal.

The representatives of 10 political parties and groups affiliated with the Government, convening at National Freedom Front Leader Minister Wimal Weerawansa’s residence in Colombo over the weekend, collectively voiced their opposition to handing over a stake of the ECT to India or any other foreign entity.

SLFP General Secretary State Minister Dayasiri Jayasekara, Pivithuru Hela Urumaya Leader Minister Udaya Gammanpila, Lanka Sama Samaja Party Leader MP Prof. Tissa Vitharana, Democratic Left Front Leader Minister Vasudeva Nanayakkara and Yuthukama Organization Chairman MP Gevindu Cumaratunga were among the attendees.

From ECT to WCT

As domestic pressure was mounting, the Government higher-ups over the weekend decided to take a step back, and Prime Minister Mahinda Rajapaksa in a last minute discussion with the TUs on Monday morning assured that full ownership of the ECT would remain with the State-run SLPA.

Instead, the Government is looking at the possibilities of constructing the planned West Container Terminal (WCT) of the Colombo Port with Indian and Japanese investment. Finer details are still to be made known, but it was said to be a ‘Built-Operate-Transfer’ (BOT) arrangement with a time-frame of 35 years. The share-holding basis is not yet clear.

This proposal, however, has not met with heavy opposition domestically because the WCT is entirely a new construction, which the Government can hardly afford on its own in this difficult period. In fact, the proposal has received favourable comments from a considerable section of TUs and other advocacy groups in the joint movement. A similar arrangement was proposed by the TUs in their collective letter to the President as well.

Yet, some groups, including the Janatha Vimukthi Peramuna (JVP) affiliated TU, still frown upon the idea. They decry the new proposal stating that it is a trade-off and the citizenry should not be taken for granted in that manner.

While the JVP was active in the TU struggle, the main Opposition Party, the Samagi Jana Balawegaya (SJB) led by Opposition Leader Sajith Premadasa took a backseat throughout the ECT campaign except giving a few voice cuts to media here and there against “selling national assets.” The United National Party (UNP) mostly refrained from making any comments, although it was under their administration that the deal was originally conceived.

India reacts

Just a couple of hours after Prime Minister Rajapaksa’s assurance to the Ports Authority TUs, a Spokesman of the Indian High Commission in Colombo, in a statement, called on the Sri Lankan Government to abide by the existing agreement on the ECT. The statement, published in newspapers yesterday, was noted for its blunt delivery. It showed the displeasure of India over cutting it off from the ECT project contrary to initial agreements and subsequent verbal commitments in that regard even “at the leadership level.”

It was unclear whether this statement meant that India was not agreeable to the proposed WCT arrangement. Given that nearly 70 percentoftranshipment containers handled by Colombo is Indian export–import cargo, Sri Lanka presently depends on India for the success of that business. Japan had not so far made any comments on the issue.

Moreover, Sri Lanka has sought a debt moratorium from India in the face of the pandemic-induced economic crisis, and is also looking forward to a US$ 1 billion currency swap with India to boost its foreign reserves. India was also the first to send a COVID-19 vaccine to Sri Lanka, (the Oxford/AstraZeneca vaccine manufactured by the Serum Institute of India) which was a donation of 500,000 doses under its neighbourhood ‘Vaccine Maitri’ programme.

With a hard battle ahead at the UN Human Rights Forum in Geneva next month, foreign policy analysts observe that Sri Lanka will have to count on the support of its influential neighbouring giant if it is to successfully beat the odds.

As the nation marks the 73rd Independence Day tomorrow (February 4), a hard but important question that remains is whether any nation can be truly “free” amidst the current geopolitical complexities of world relations. Analysing the context of recent developments, it no doubt is a thought provoking question with elusive answers.