3 March, 2021

Blog

Colombo ETC Embers Glowing; Bureaucratic Incompetence?

By Rusiripala Tennakoon –

Rusiripala Tennakoon

Crucial infrastructure projects remain in the focus of many sovereign wealth funds (SWFs) and financial conglomerates. Dubai Ports World has a $ 3 billion looking for investment across Indian Ocean logistics sector. UAE Investment companies have signed up with China Development Bank for a $ 10 Billion joint venture. A ‘tech town’ is in the offing near the UAE port of Jebel-Ali with an investment of $ 600 million from Alibaba to develop mobile apps and Robotics. Oman’s new port Duqm has turned into an Industrial park involved in shipbuilding and auto assembly. Hambantota port in Sri Lanka is being baptized as the maritime hub of China’s Belt and Road initiative. This is just a little of the global scenario relevant to the issue at hand.

The active presence of China in this region and particularly in SL has exposed us to a high alert of the powers that be. Although Sri Lanka first approached India with the request to develop the Hambantota port it’s dilly dallying paved the way for the alternatives. Now India is exploring ways and means to monitor and find ways to wiretap China, offering to upgrade the Hambantota Airport and soliciting indirect participation in getting involved in the development of Colombo’s newest Container Terminal and its operations. The current dilemma we are facing is associated with this setup.

With the tremendous increase the world is experiencing in the demand for trading across seas, ports have become the pivotal role players serving not only the vital economic functions but also becoming hot trouble spots in world politics in addition to bringing a variety of benefits to the economy of the countries. World has seen this role-play from pre-historic periods. Between the 14th and 16th centuries economic activities of South East Asia was centered on spice trade. European nations were trying to establish their dominance in the Indian ocean. They searched for a passage round Africa and Atlantic to gain quick access to spice rich lands in the eastern part of Asia. The Portuguese mariner Bertolameu Dias discovered the cape of Good Hope route in 1488 and Vasco da Gama reached India through the same route in 1498.

History also shows us how the various rulers in the spice producing countries have entered into corrupt deals with the European buyers from time to time offering them monopolies in the trade on agreements reached in their own personal interests virtually surrendering the rights of the inhabitants and delivering them as forced labor to the European invaders. The swelling of the European presence in the region under various entities such as Dutch East India Company and English East India Company bear ample evidence to this fact. These intrusions soon culminated into physical invasions massacring almost the entire populations in the spice growing island nations leaving only a few alive and that too for the benefit of the trespassers just to get them information on how to grow and produce mace, nutmeg and cloves. History is full of examples where unscrupulous rulers have surrendered the sovereignty of the countries they ruled wholesale for their personal gains. Seeing through these horrible events in the history people always desire to safe guard the national interests when it comes to any sort of intervention by foreign elements in the economic affairs of a country. This is where the leadership qualities have to be  displayed truly for the liking of the masses.

The prime Minister of Singapore delivers a national day address to the nation on every 9th of August, their national day. The national day address of the PM is awaited by the whole world because he spells out policies and plans that become important to several sectors in a global sense. Several years ago in one of these speeches the Singapore PM pronounced that the business income from the Changi Airport is expected to decline due to the world aircraft industry contemplating the  manufacture of long haul aircrafts that can travel direct from Melbourne to New York non-stop. He said that Singapore’s GDP will be affected as a result and to compensate it they are going to develop the Singapore harbor by increasing its cargo handling and the efficiency to supplement the loss revenue from the Air port.

This statement teaches us two lessons. The first is how the national leaders are knowledgeable and acting with foresight to meet the future contingencies. The second is how important the port operations of a country are when it becomes necessary to augment the national income. As for us we are very fortunate as a nation that we have the best chosen in the cabinet who can mastermind the augmentation of national income from vulnerable and strategic sources with experience and  knowledge based rhetorics. 

Be that as it may, our port issue is hanging fire from the last regime days. This provides a good escape route for the various parties to play political ‘ping-pong’ while the masses watch with interest. Somewhere around may 2019 we heard that the MS-RW government decided to enter into a MOU with Japan and India (on a tripartite basis) to develop the ETC with a loan facility of $500 million and the construction to be undertaken by India. We were also informed that the loan was on very attractive low interest rates with long grace periods. But the proposal met with lot of public criticism alleging that the SLPA was in a position to undertake the development work and opposed the envisaged transfer of terminal operation rights to a newly established company jointly owned by Sri Lanka, Japan and India. However as usual the problem was the lack of transparency of the proposal for public perusal and evaluation. It appears that this is an area that remains well guarded and protected under all successive governments! The sovereignty of the people enshrined in the constitution stands subjugated to that extent.

The current situation has arisen due to the Government that came into power offering 49% of the ownership of the shares to an Indian Company. According to Govt. spokesmen it is neither a lease nor a transfer of ownership. But it is an indefinitely on going share ownership in a vital operation of the country associated with one of its prime locations crucially important as an asset in the strategic sector. The government has to pay heed to this public claim in the context of their election promises and declared policy stands. What is significant is the country has a right to know what exactly is the proposal instead of bits and pieces uttered here and there. No body should fear to divulge the truth. After all if the current proposal is more beneficial (to the country!) in the long run, there should not be any qualms about the matter.

On the other hand the voice of the people in particular the work force should receive the fullest recognition and regard as they are more concerned about the lasting effects. Our own experience in a proposal of a previous government to privatize the State owned banks is a case in point for us to ponder over. In early 1990s State banks came under heavy attacks by the then government to the extent the Minister of Finance himself declaring the banks are bankrupt. We remember as if it were yesterday how the matter culminated into a no-confidence motion against the FM in the Parliament. We respectfully, graciously and with great pride recall the role we played as employees and trade unions in that struggle to safeguard the state banks for the future generations by fighting an unforgettable battle against the move. Today, all successive governments of the day regard the state banks as there ultimate source of solace(last resort) when it comes to borrowing for the government. During some eras they have been treated as bottomless wells. We remember the phraseology they used to baffle us to win over the public, calling it commercialization, peopalization and so on which we defeated successfully. They even proposed what was called ESOP(employee share ownership plans) to influence the employees to agree to the sale of shares of the bank.

Coming back to the current issue there are a few questions that the country should raise.

The first is, are we so desperate in raising $ 500 million and that too when needed not at once but in tranches running over a period? Are we not having captive funds (virtually sovereign funds) which can very easily afford if not singly, as consortiums under a lead arrangement to meet this obligation. After all if it is a profitable venture for a foreign lender to get involved why shouldn’t we muster our resources and benefit by the profits to be generated while saving the earnings of the venture to ourselves at the same time?

The second question is, are we under some obligation or pressure from international powers to yield to a request against our wish? Well, the answer is in the hands of the government. When there was intense pressure brought on us by powerful blocks during the last stages of the internecine war we were told that our president then stood firm and said leave it to us. If the powers that be do not want to abide by such a reaction best is to leave it to the people to decide. A referendum will indicate whether the people want to succumb or not. When UK decided to withdraw from EU (brexit) it is the people who endorsed the decision. We will politely let them know that it is what we want.

The third is ,are we dealing with the right party in this matter? To the best of our knowledge the Port industry for India is an extremely competitive affair. It has 12 major ports and 205 minor and intermediate ports. A mega project named Sagaramala is operating with a national perspective plan to develop their Port business adding six new mega ports some in close proximity to ours. India has a coastal belt of 7500 kms  and it is the 16th largest maritime country in the world. It has allowed Foreign Direct Investment (FDI) to an extent of 100%for harbour construction and maintenance projects with long tax holidays to investors. They have set national targets for achieving specific number of cargo traffic under a plan. Indian govt. has taken steps to improve their operational efficiencies through mechanizations, investments and development. We should not feel shy to ask our big brother to leave our bread and butter to ourselves. We are friends, neighbors and they are the crusaders of our valued religious culture. We will never be anywhere close to them in the competitive field but wish to be acknowledged as complimentary players. 

The last question is, who is the party that we are planning to go with in this program?

For all intents and purposes, it is not the Govt. of India but a Company in India called Adani Ports and Special Economic Zone limited( APSEZ). Let us examine their profile and the current engagements of  this Company in Port related activities in India.

* APSEZ completed the acquisition of Khrishnapathnam Port Company Ltd.for US$ 1.63 Billion in October 2020

* In July 2020,they launched an offshore Bond offering to raise US$ 750 million.

* Between 2018-19 APSEZ became the first Indian Port operator to handle Cargo movement of 200 million M tons.

This company is saddled with its own commitments under the strategic plan of the Indian Government to develop and achieve the national targets of the Indian Government in the Port business.

These are some of the relevant factors that deserves special consideration entrusting affairs in the context of putting into full operation a terminal which has some unique values and potential among the harbors of the world. The strategic location, size and depth, and the climatic conditions are all some exceptionally valuable treasures we have associated with our ETC terminal. Any partner who is also a competitor in the same business may develop  conflicts of interests in the course of ongoing operations. 

Hence a cautious approach is warranted. Considerations go beyond the ordinary thinking capacities and experiences of those in the game front currently.

I conclude with all best wishes!

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Latest comments

  • 4
    4

    The President’s response to the controversy involving the Eastern Container Terminal (ECT) leaves the question whether the general knowledge of Rajapaksas’ is zero.
    While accusing the previous government, the President grandly tells the nation that while Sri Lanka will retain 51% of the shares, a handpicked Indian company will own 49%!!!!
    Isn’t this the SAME AGREEMENT (minus Japan) which the previous government entered into? They also had a consensus among them that the host country will retain 51% of the equity in the ECT!!!
    Who does the President think he is fooling?
    Clearly, the Indian investor Adani Group is purchasing 49% of the ECT in order to share in the profits. If this is not a sale, then what??????
    Doesn’t the President understand that once this agreement is signed, SriLanka will be UTTERLY VULNERABLE to India’s possible monopoly in our largest and busiest port’s container trade industry, in addition to sharing 49% of the profits generated by the already profitable ECT????
    .
    Although the Rajapaksas govern the country, they are only a handful.
    It is the Sinhalese Buddhists who have the real power.
    Therefore, WE SHOULD GET TOGETHER with Maha Sangha including Venerable Elle Gunawansa Thero and Venerable Bengamuwe Nalaka Thero and USE OUR VETO to STOP Rajapaksas’ treacherous move to sell our ECT to India.

    • 4
      2

      Another dangerous and suspicious aspect that should be considered is the close strategic and military relationship between India and the US.
      The Adani Group’s offer of US$600 million peanuts in exchange for the half of the ECT came at a time Gotabhaya “lost” MCC’s US$480 million small potatoes in exchange for a 2 million acre strip of land all the way from Colombo Port to Trinco Port.
      Who knows, there could be a connection.
      One cannot ignore the dire possibility that once India secures Colombo Port’s ECT, the US’s MCC grant will re-emerge.

      • 1
        4

        Monkey Champa is off his meds again.

        The ECT was sold by the previous govt. Since it is a govt to govt transaction the current govt cannot change it.

        ECT may already be profitable but if it is upgraded and expanded it will be more profitable? but this donkey cant see it .

        I dont see any issue with it being sold while keeping controlling interest in SL.

        • 2
          0

          …..”it being sold while keeping controlling interest in SL.”……..
          But that was the rhetoric “Nothing will be SOLD” that this govt said before election AND STILL says so. How they can SELL 49% and say it is not a SALE of an asset of the country? IT is absurd and convoluted logic. How can the country EVER get back the 49% ? At least in a lease there is hope that the temporary OWNERSHIP of any asset is unrecoverable. Can Sri Lanka EVER get back Galle Face No.1 property SOLD to Shangri La .
          Limit of hypocrisy.

          • 1
            0

            …sorry…”asset is unrecoverable.” …
            should read “asset is RECOVERABLE”.

        • 1
          1

          What about you a14455 / January 19, 2021?

          You sound to be permamently on drugs or not ?

          Let your brother to prescribe something for you. Sooner than later. You the kind of idiots would not let srilanka becoming a country for all communities.

          wow – TODAY the term has turned out to be ” so called investments”, Bps would lick the backsides of Indians sooner than later. If they would be offered, they would do with anyone. So cheap are the Rajapakshes… history proves. Today Nandasena is locked up in his JANADHIPATHI maedura as if the nation voted for a wedabari tarsan. Give us one single good thing BPs have achieved for the benefit of the masses during the last 14 months ?

    • 0
      2

      Chimpi, we all need to find a way to throw you in the ocean. Will the maha sangha help? We have great monks like Gnanasara, and that skinny bugger from the East and all the underworld guys to help us.

  • 2
    0

    This “ETC” appears to be a “DONE DEAL”. Our President has already said this was discussed with Modi, the PM of India during his first “Official Visit” undertaken after assuming duties. Like in the case of the “20A”, the President waited till everyone exhausted their breath to announce that it was HIS draft and only HE owns it. Didn’t all the “Critics” put the tails behind the legs and voted giving it a “2/3rd” majority blessing? In like manner, all will “Accept” it and it would be a “Done Deal” with MODI. What is this “Adani” and “Modi” “Conglomerate”? According to the published profile of “Adani”, it is the “LARGEST” port operator, coal miner, and distributor, private power producer, and distributor, city gas distributor, and importer of edible oils. Now the latest business venture Adani has entered into is “Airport Operations”. There is a “National Policy” in India, that no private entity must be allowed to handle more than two airports. But strangely, this “Policy” has been “Overlooked” by Modi Government and allocated more than six such airports and more are to be allocated. This is the “CONNECTION” now that has been divulged by the media in India. Our President has now got “Succumbed” to the “Arm Twisting Tactics” which they are so smart at and always resort to doing as during Rajive and JR regimes.

    • 0
      1

      “The second question is, are we under some obligation or pressure from international powers to yield to a request against our wish?”
      Simple. Beggars can’t be choosers. Mr. Rusiri is welcome to eat “sovereignty” if he prefers. However, the whole episode is a good example of how politicians take voters for s ride. Even the MCC would have been signed if it wasn’t withdrawn. At least Ranil was honest enough to openly do whatever he did. He didn’t espouse fake patriotism to win elections, which is what the present lot did. It is time people, patriotic or otherwise, realized there is no free lunch.

  • 1
    0

    My comment continued…… I don’t bother what Modi of India does with India’s affairs. In fact, he is making decisions, to say, to whom India’s resources are entrusted and what those outfits are left to be handled by him and his Government. Adani is an Indian commercial establishment and the Indian Government assigning the local resources to them is understandable and acceptable. The problem with our Governments is why 100% of the holdings of our State Resources be “Shared” with “Foreign Commercial Establishments? In this particular case, the Port Authority of Sri Lanka has and can run this East Terminal operation without any outside assistance and run it as a source of revenue in US Dollars. We must not forget that all its revenue accounted and collected in US Dollars and in that respect, it is a “Milking Cow” owned 100% by the State of Sri Lanka. All the employees together with its Higher Management has submitted plans to run it successfully and profitably. Then WHY this proposal to “Divide” that “100% Ownership” of the Sri Lanka State with a “Foreign Commercial Establishment”? Isn’t there something “Fishy” and it does smell a “Rat”.

  • 2
    2

    Modi to Gota

    you give us Eastern Terminal
    we give you vaccine

  • 3
    1

    Sri Lanka has what Sinhalayo say ‘Udin Mithuru Yating Hathuru’ Big Brother!

    • 0
      0

      Eagle,
      At least now you should admit that you were taken for a ride by Nandasena.

  • 2
    3

    India is a useless country run by ultra nationalists who have a bloated ego, and think they are like USA. The only thing the Indians have achieved is to multiply like rats and pollute the environment – half its population is starving and living in slums. Yearly caste killings, honour and dowry killings amount to thousands.
     
    India didn’t keep their agreement about IPKF either. They came here to disarm the very terrorists they had trained, financed and armed and started killing innocent civilians-the Indian soldiers were so poor that some had not even seen a tube of toothpaste!
     
    In the headlines:
    “Caste kills more in India than coronavirus”
     
    “The Indian Dalit man killed for eating in front of upper-caste men”
     
    “Dalits bear brunt of India’s ‘endemic’ sexual violence crisis
    Last week, a 14-year-old girl Dalit girl was found hanging from a tree in a village, having been raped and murdered. Just a few days before, a three-year-old girl was raped and strangled to death….”
    “Tamil Nadu: Blanket of Silence Over Caste-Based Atrocities During COVID-19 Lockdown”
     
    India does not have good intentions for Srilanka. Keep them out.

    • 0
      1

      Only China has good intention for Sri Lanka and lately Pakistan via China and soon North Korea. Sri Lanka is in good comapny.

      Japan, India, USA, UK, Europe etc etc have no good intention for Sri Lanka keep them all out.

    • 0
      2

      P.P,

      “Just a few days before, a three-year-old girl was raped and strangled to death”
      The trouble with so-called Sinhalayo Buddhists is that that they are ever ready to point out others’ shitting while they themselves are eating the shit.
      Have you never heard of 5year Seya who was taped and killed, and 14 year old Krishanthi who was taped and murdered with a grenade in her private parts?
      “Sri Lanka is a country run by clueless bankrupt militarists who are worshipped by idiots who think a fake tooth can produce rain”

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