Colombo Telegraph

Colombo Port Becomes Ring Of Diplomatic Fire: China Lobbying To Derail ECT Agreement With Japan And India

Colombo Port has now become a ring of ‘diplomatic fire’ with China openly lobbying to derail the Sri Lankan government’s agreement with Japan and India over the development of the Easter Container Terminal (ECT).

The tripartite Memorandum of Understanding (MOU) on ECT was perceived by many as a move to counterbalance China’s growing influence in Sri Lanka’s ports sector. Under the agreement, 51% of the Terminal Operating Company (TOC) handling affairs at the ECT will be owned by the Sri Lanka Ports Authority and the remainder will be shared between Japan and India.

In exchange, Japan will grant a concessionary loan to Sri Lanka at 0.1% interest rate with a 40-year repayment period. It is now learnt that the loan will come close to USD 800 million.

The move, however, appears to have rattled China which handles the Colombo Port’s Colombo International Container Terminal (CICT) through China Merchant Port Holdings. It is against this backdrop that China is now working to derail the signing of the final agreement on the ECT development due in three months, informed diplomatic sources said.

It has come to light that CICT CEO Jack Huang has facilitated a meeting between the notable Rajapaksa ally Capt. Nihal Kappetipola, a former Managing Director at the Sri Lanka Ports Authority (SLPA) and SLPP trade unions at the ports authority. The meeting took place on the afternoon of July 19th within the SLPA premises.

The meeting centered on the ECT agreement and the possibility of the SLPP joining the trade union action launched by the JVP-affiliated unions. Multiple sources confirmed that the meeting bore fruit and the SLPP unions agreed to join forces with the JVP-affiliated unions to form a “common front” against the ECT agreement.

“After the meeting, Kappetipola left the SLPA premises at 4.30 PM in a white SUV owned by the CICT. According to standard security measures, registered CICT vehicles can access the ports premises without any restriction,” a source familiar with the development told Colombo Telegraph.

“The nexus,” he said, “is now clear. It is China that is at the centre of the ongoing protests against the ECT development agreement. Although their reasons are probably commercial, this undue interference is a stark violation of the country’s sovereignty and harm the interests of the host nation.”

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