Sri Lanka, Japan and India signed an agreement to jointly develop the East Container Terminal at the Colombo Port. The joint initiative is estimated to cost between $500 million and $700 million. As per the agreement, 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%.

The ECT is located some 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.

Japan is likely to provide a 40-year soft loan with a 0.1 percent interest rate. Details of India’s contribution to the initiative are awaited, but New Delhi’s interest in partnering the project is well known. Over 70 per cent of the transhipment business at the strategically located ECT is linked to India, according to official sources.

While Japan had been part of negotiations even last year, the project assumed a predominantly ‘Sri Lanka-India’ dimension, especially in the local media. Japan has been a long-standing partner of Sri Lanka, and one of Sri Lanka’s biggest donors in the past decades. Japan also helped develop of the Jaya Container Terminal at the Colombo Port, supporting its operations since the 1980s.