India and Japan have struck an important tripartite agreement with Sri Lanka to jointly develop the “East Container Terminal” in the Port of Colombo. As per the agreement, a terminal operator company will be set up with the Sri Lanka Ports Authority holding a 51% stake and the rest being split between India and Japan.
The Colombo Port is considered the most commercially viable project and has attracted around $1.4 billion investment from China under the Belt and Road Initiative. The Sri Lankan government had planned to develop three terminals — South, West, and East — with a depth of 18 metres that will allow larger container ships to operate at the port.
China Merchant Holdings completed the development of the South Terminal in 2013, while work on the East Terminal remains stalled due to diplomatic manoeuvring between India and China. Read More