President Sirisena says no to PPP for Colombo Port’s East Terminal; move apparently snubs Indian interests

President Maithripala Sirisena yesterday dropped a bombshell saying the Colombo Port’s East Terminal will not be privatised or developed via Public Private Partnership but will remain with Sri Lanka Ports Authority despite an on-going exercise for non-state involvement.

Speaking at the Sri Lanka Ports Authority’s 38th anniversary as Chief Guest President assured East Terminal will not be handed over to any other party.

The ceremony incidentally was held at the East Terminal premises itself.

“We are committed not to hand over the Eastern terminal to any party because such an action will lead to close the Sri Lanka Port Authority in another ten years,” he said.

HIs comments comes after the SLPA in June 2016 had called for Expression of Interests for private sector proposal to develop and manage the East Terminal and several parties had responded. Additionally there has been an assurance given by the Government especially Prime Minister Ranil Wickremesinghe that East Terminal will have an Indian investor/party so as to balance off any regional concerns over Chinese involvement in Hambantota Port.  After the EOIs were called, an additional criteria was brought in that interested bidders should have a regional partner.  Seven parties had responded to the EOI with Asian Development Bank as a consultant to the process.

Either aware or unaware of these developments, Sirisena was emphatic when he addressed thousands of Port employees yesterday that national and SLPA interest will be paramount.

Ports and Shipping Minister Mahinda Samarasinghe speaking at the ceremony said that SLPA had lost Rs. 3.4 billion due to an idling East Terminal for two years, which has been developed by SLPA but needs cranes etc to become operational.

Because of lack of an additional deep water terminal , Colombo Port has experienced a congestion of large vessels waiting for their turn for berthing at the mega and modern and only deep water terminal in South Asia – the Colombo International Container Terminal controlled by China Merchant and 15% owned by SLPA . Colombo port last year saw a 10% growth in business whilst this year so far it has been below par.

In his speech President also said previous government had agreed to hand over the Hambantota Harbor to the Chinese government company on September 4th 2014. He said there were many harmful conditions in the agreement discussed by the previous government and no one raised an issue then, he pointed out.

He said in the present agreement with China, the government was able to reduce the number of lands allocated for the project by 50 percent. The current agreement was reached fully respecting the laws of the country, the constitution and rights of the country, he said. The security will be overseen by the Sri Lankan Navy, the President asserted.