Foreign firms barred from bidding

Sri Lankan President Maithripala Sirisena told the Sri Lanka Ports Authority (SLPA) here on Tuesday, that he would not, “under any circumstances”, allow the contract to complete Colombo Port’s East Terminal to be given to a foreign party.

Among the companies bidding for the project to complete the terminal on a Build, Operate and Transfer basis, were two Indian firms which had a good chance of swinging the deal. In the early stages, the Sirisena-Wickremesinghe government was keen on giving the contract to an Indian company to balance China and India in the distribution of projects.

The then Minister of Ports, Arjuna Ranatunga, even named the Indian firms, Shapoorji Pallonji and the Container Corporation of India, as the likely recipients of the contract.

In the master plan of Colombo Port Expansion Project, the East Container Terminal has a 1200m long Quay wall, alongside water depth of 18m and a yard capacity of 2.4 million TEUs.

In May 2015, the SLPA had completed, at  a cost of US$ 80 million, a 440m single berth as the first phase of the ECT development plan to cater the shortfall in the capacity of container handling in the port of Colombo.

Chances of the expansion project going to an Indian party receded when the   government suddenly said that it needed to reframe the tender conditions and the reframing process seemed to be never ending. Presumably, government was under pressure from port trade unions and nationalists within the government who were against an Indian involvement.

Fallout of Controversial Hambantota Deal

The President’s decision on the Colombo East Terminal followed the port unions’ objections to the recently finalized deal on the Hambantota port with the Chinese company CMPort, and their threat to go on strike over it.

Sirisena met the port unions and told them that he had put a clause in the agreement with CMPort which said that terms could be changed by mutual consent at anytime.  On the Colombo East Terminal he categorically stated that he will not “under any circumstances” give it to a foreign party.

India was keen on getting the Colombo East Terminal contract, having opted out of the Hambantota port contract earlier when it was offered to it by the then President Mahinda Rajapaksa.

According to The Sunday Times the SLPA had invited Expressions of Interest for the East Container Terminal in June 2016. It learned that five consortia had applied.

The first was Aitken Spence PLC with Port of Singapore Authority (PSA) and Shapooji Pallonji, which is an Indian business conglomerate. The second was China Merchant Holdings International (CMHI) with Evergreen, CMA CGM (shipping company) and Summit Shipping from Bangladesh.

The third was John Keells with APM Terminals, Maersk Lines and Container Corporation of India Ltd. The fourth was Terminal Link (of which 49 percent is owned by CMHI) with CMA CGM. The fifth was Hayleys with Westport Shipping Services LLC (of which 25 percent is owned by Hutchison Ports), Mitsui and Co, Mitsubishi and Co and NYK. (Dawn)