Delay in launching ‘ECT’ causes loss of about Rs 50 billion a year to the government

Shipping and ports industry experts have raised concerns over the impending risk of losing Colombo Port’s transhipment hub status in the region due to the delay in developing its East Container Terminal (ECT).

The delay in launching operations of the ECT has caused the government a loss of around Rs. 50 billion per year.

Govt yet to decide whether to develop it under SLPA or hand over to India

As learnt by The Sunday Morning, the Government is yet to take a decision on the development of the ECT as well as whether it should be developed under the Sri Lanka Ports Authority (SLPA) or handed over to India as per the agreements reached by the previous Government.Experts warned that further delaying the launch of the development activities will cause the government a loss of millions of rupees per day.

The trade unions attached to the SLPA had recently held an industrial action demanding the Prime Minister or President to give an assurance that the ECT will not be handed over to India.

The Colombo Port currently consists of three main parts, one of which is the JCT that belongs to the SLPA. The South Asia Gateway Terminals (SAGT) is owned by Sri Lanka and international entities. A majority of the shareholding in the CICT is owned by China. This terminal is located adjacent to Colombo Port City. As a result, a terminal of sufficient capacity for the SLPA to dock large ships does not exist within the Colombo Port at present.

ECT is being developed to accommodate large ships

Against such a backdrop, the ECT is being developed to accommodate large ships and the SLPA commenced development at the ECT with funds obtained from a state bank.

According to the SLPA, the Colombo Port Expansion Project is being implemented in an area encompassing about 600 hectares. This will have three terminals: South Container Terminal (SCT), ECT, and West Container Terminal (WCT), each with a 1,200 m length and equipped with facilities to accommodate three berths

The ECT second largest deep-water project of the port

The ECT, implemented by the Mahinda Rajapaksa Government under the Colombo Port Expansion Project, is the second largest deep-water project of the port. In this, 400 m of the planned 1,200 m-long terminal was completed in 2015.At present, the completed 400 m stretch of the ECT is used by the SLPA to handle break-bulk cargo.

Awaiting committee report

Due to the mounting pressure put by the ports unions earlier this year, the President appointed a five-member committee consisting of the secretaries of the Ministries of Power, Energy, Ports and Shipping, Roads, and Highways together with Secretary to the Ministry of Industrial Export and Investment Promotion M.P.U.D. Mapa Pathirana and SLPA Chairman General (Retd.) Daya Ratnayake.

The committee is assigned to look into among other things the delay in the development of the ECT. Moreover, the committee was requested to submit proposals for the development of the ECT.

The committee was to prepare a report within 45 days from 3 July.

Nevertheless, there is no trace of the committee report at present, as the report is yet to be made public.

The delay in launching the planning work of the terminal raised doubts among the unions, as they were concerned whether there was any attempt to hand over the development of ECT to India.

Last year, the SLPA signed the joint MoC to develop the ECT at the Colombo Port.

 SLPA retains full ownership of the ECT

According to the authority, the SLPA retains full ownership of the ECT, and a company named Terminal Operations Company (TOC) would be established where Sri Lanka would retain 51% of shares while the balance will be purchased by joint venture partners.

Despite the MoC being reached between Japan, India, and Sri Lanka last year, the issue was swept under the carpet with last year’s presidential election without any further development until last month’s gantry crane unloading issue popped up.

Secretary to the Ministry of Ports and Shipping U.D.C. Jayalal told The Sunday Morning that the Ministry had not yet taken any decision with regard to the ECT.