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Sri Lanka, Japan & India sign deal to develop container terminal
Why is it in news?
- Sri Lanka, Japan and India signed an agreement to jointly develop the East Container Terminal at the Colombo Port.
More in news
- Joint initiative: The joint initiative is estimated to cost between $500 million and $700 million.
- Significant improvement: The signing of the Memorandum of Cooperation (MoC) is significant, given that the countries had been negotiating the deal since last year with little success.
- What is the agreement?:(1) As per the agreement signed, the Sri Lanka Ports Authority (SLPA) retains 100% ownership of the East Container Terminal (ECT), while the Terminal Operations Company is jointly owned.(2) Sri Lanka will hold a 51% stake in the project and the joint venture partners will retain 49%.(3) The ECT is located some three km away from the China-backed international financial city, known popularly as “port city”.
- 40-year soft loan:(1) Japan is likely to provide a 40-year soft loan with a 0.1% interest rate.(2) The SLPA described the “envisaged Japanese loan” as “one of the best loan terms Sri Lanka has obtained”.
- India’s contribution not disclosed yet:(1) Details of India’s contribution to the initiative are awaited, but New Delhi’s interest in partnering the project is well known.(2) Over 70% of the trans-shipment business at the strategically located ECT is linked to India.
Source
The Hindu