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Colombo Port ECT: Confusion over Investment

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By Eng. D. Godage

The Colombo Port East Container Terminal, ECT, is hot topic, being an important economic nerve centre essential to the country but getting involved as a pawn in geopolitics. Opinion by I. P. C. Mendis in The Island (27.01.2021) prompted to clarify some of the matters and expose true facts.

ECT will neither be sold nor leased; it will be developed through investment from an Indian party and others by giving out 49 per cent share to them while keeping 51 per cent share with the Ports Authority. This is the government stance. Public awareness exists on Build Operate Transfer (BOT) agreements in the port with two terminals operating under this method. Land and sea area are leased to the relevant party by a lease agreement for a specified period, 35 years in both, and the private party invests to develop the terminal. So investment is an essential part in those agreements. But presently announced terminology creates confusion.

The Colombo South Harbour would not have been a reality if not for the Asian Development Bank (ADB), which offered a major loan for infrastructure development when other major donor agencies declined to come forward. The ADB Country Lending programme had only $ 100 million in 2005 while the cost of the South Harbour project was estimated at $ 330 million. There were unfavorable loan covenants such as Jaya Container Terminal (JCT) privatization, and that became a hindrance.

In 2004, the government sought private sector funding for the breakwater works and SEMA (Strategic Enterprises Management Authority) advocated the same even after showing that there was no precedent as regards private sector investment in such port infrastructure globally. Different methodologies, like bond issues, the setting up of a Company as SPV (Special Purpose Vehicle) for commercial borrowing were talked about until May 2006 without success. Fresh negotiations thereafter with the ADB reached fruition and the critical covenants were either relaxed or diluted. The loan amount was increased to $ 300 million and the agreement thereon signed in April 2007.

Critical loan covenant was the selection of private investors for the first two new terminals chosen through open competitive bidding process followed by signing of concession agreements. Subsequent amendment to the Loan Agreement in June 2012 at the request of the Ports Authority changed ‘the first two terminals’ to mean ‘any two’. At no stage did the agreement include private participation in all three terminals.

Proposals were invited from prequalified private investors for the first terminal viz. the South Terminal from February 2007 even before signing of loan agreement to comply with loan covenant. In fact, invitation was made on two occasions as the first was cancelled in February 2008 when a total of five offers with two favourable ones were available. Compliance with the loan covenant was delayed by over a year and this led to a delay in the release of funds from ADB and commencement of construction.

The Memorandum of Cooperation signed with Japan and India in May 2019 proposed the development of the ECT under an Operations Company with 51 per cent shares retained by the Ports Authority. When the Minister submitted a Cabinet Memorandum naming one Indian investor, Adani, disregarding Japan, the government deviated from the agreement as well as the ADB loan covenant of open competitive bidding process. These deviations may be of different degree but the fact remains that they are digressions.

Another issue is that Hambantota Port and the Port City are totally different scenarios. The former is a white elephant in short even though the Chinese have acquired it. Two feasibility studies, one by SNC Lavalin of Canada and other by Ramboll of Denmark did not show viability of the project unless container operations started immediately. While both the Colombo South Harbour and the Hambantota Port projects commenced around the same time, the Hambantota project received priority. As regards the Port City, benefits may accrue after 10 years or more. On the other hand, since last October, the ECT has been operational with one berth built by the Ports Authority and is making profits.

The proposed formula for the ECT, in the referred Opinion, is a Joint Stock Co. As regards both SAGT and CICT, there are BOT (Build Operate Transfer) Agreements signed after being cleared by the highest legal authority of the country; they are between two parties, Ports Authority and the investor. They include a condition that Ports Authority hold a particular share, viz. 15 per cent. On the other hand, Joint Stock Company formation by the Ports Authority as the major shareholder seems a different process. The formation of such company is not permissible under the SLPA Act as found some time ago.

Further to the registration of an unlisted company and proposed structure, it is essential to divulge, inter alia, the total equity in order to estimate the Ports Authority share, Articles of Company to be acceptable to other private party, method of raising $ 500 million as building cost and liability on Ports Authority as lead partner.

Another subject that needs attention is the announcement by the Minister that West Terminal has to be commenced now. It has to be noted that ECT requires at least two more years to operationalize in complete form while only one berth of ECT is operational now by the Ports Authority. Another matter worth mentioning is that the Colombo Port Development Plan prepared and presented by the Ports Authority with the assistance of ADB in March 2019 states the capacity shortage starts from 2020, ECT operations start in 2019 and West Terminal commences operations in 2025. The ECT operations have been delayed and as such the WCT operation is not urgent with ample time available for planning.

What is urgently needed is a prompt decision on the ECT operations already behind schedule and the acceleration of the procurement process by the Ports Authority for remaining work and this is time-consuming.

Those in the maritime industry and others who wish for the success of Colombo Port highlighted the delay in operationalisation of ECT. Trade Unions are agitating, politicians are talking but no productive action has been taken. In the end, a prompt decision is essential as terminals cannot be built overnight but that task takes about two years. Otherwise, the Colombo Port will face congestion, ship diversions and bypassing and above all losing global reputation and position.



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Opinion

Thoughts for Unduvap Poya

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Arrival of Arahant Bhikkuni Sangamitta

Unduvap Poya, which falls today, has great historical significance for Sri Lanka, as several important events occurred on that day but before looking into these, as the occasion demands, our first thought should be about impermanence. One of the cornerstones of Buddha’s teachings is impermanence and there is no better time to ponder over it than now, as the unfolding events of the unprecedented natural disaster exemplify it. Who would have imagined, even a few days ago, the scenes of total devastation we are witnessing now; vast swathes of the country under floodwaters due to torrential rain, multitudes of earth slips burying alive entire families with their hard-built properties and closing multiple trunk roads bringing the country to a virtual standstill. The best of human kindness is also amply demonstrated as many risk their own lives to help those in distress.

In the struggle of life, we are attached and accumulate many things, wanted and unwanted, including wealth overlooking the fact that all this could disappear in a flash, as happened to an unfortunate few during this calamitous time. Even the survivors, though they are happy that they survived, are left with anxiety, apprehension, and sorrow, all of which is due to attachment. We are attached to things because we fail to realise the importance of impermanence. If we do, we would be less attached and less affected. Realisation of the impermanent nature of everything is the first step towards ultimate detachment.

It was on a day like this that Arahant Bhikkhuni Sanghamitta arrived in Lanka Deepa bringing with her a sapling of the Sri Maha Bodhi tree under which Prince Siddhartha attained Enlightenment. She was sent by her father Emperor Ashoka, at the request of Arahant Mahinda who had arrived earlier and established Buddhism formally under the royal patronage of King Devanampiyatissa. With the very successful establishment of Bhikkhu Sasana, as there was a strong clamour for the establishment of Bhikkhuni Sasana as well, Arahant Mahinda requested his father to send his sister which was agreed to by Emperor Ashoka, though reluctantly as he would be losing two of his children. In fact, both served Lanka Deepa till their death, never returning to the country of their birth. Though Arahant Sanghamitta’s main mission was otherwise, her bringing a sapling of the Bo tree has left an indelible imprint in the annals of our history.

According to chronicles, King Devanampiyatissa planted the Bo sapling in Mahamevnawa Park in Anuradhapura in 288 BCE, which continues to thrive, making it the oldest living human planted tree in the world with a known planting date. It is a treasure that needs to be respected and protected at all costs. However, not so long ago it was nearly destroyed by the idiocy of worshippers who poured milk on the roots. Devotion clouding reality, they overlooked the fact that a tree needs water, not milk!

A monk developed a new practice of Bodhi Puja, which even today attracts droves of devotees and has become a ritual. This would have been the last thing the Buddha wanted! He expressed gratitude by gazing at the tree, which gave him shelter during the most crucial of times, for a week but did not want his followers to go around worshipping similar trees growing all over. Instead of following the path the Buddha laid for us, we seem keen on inventing new rituals to indulge in!

Arahant Sanghamitta achieved her prime objective by establishing the Bhikkhuni Sasana which thrived for nearly 1200 years till it fell into decline with the fall of the Anuradhapura kingdom. Unfortunately, during the Polonnaruwa period that followed the influence of Hinduism over Buddhism increased and some of the Buddhist values like equality of sexes and anti-casteism were lost. Subsequently, even the Bhikkhu Sasana went into decline. Higher ordination for Bhikkhus was re-established in 1753 CE with the visit of Upali Maha Thera from Siam which formed the basis of Siam Maha Nikaya. Upali Maha Thero is also credited with reorganising Kandy Esala Perahera to be the annual Procession of the Temple of Tooth, which was previously centred around the worship of deities, by getting a royal decree: “Henceforth Gods and men are to follow the Buddha”

In 1764 CE, Siyam Nikaya imposed a ‘Govigama and Radala’ exclusivity, disregarding a fundamental tenet of the Buddha, apparently in response to an order from the King! Fortunately, Buddhism was saved from the idiocy of Siyam Nikaya by the formation of Amarapura Nikaya in 1800 CE and Ramanna Nikaya in 1864 CE, higher ordination for both obtained from Burma. None of these Niakya’s showed any interest in the re-establishment of Bhikkhuni Sasana which was left to a band of interested and determined ladies.

My thoughts and admiration, on the day Bhikkhuni Sasana was originally established, go to these pioneers whose determination knew no bounds. They overcame enormous difficulties and obtained higher ordination from South Korea initially. Fortunately, Ven. Inamaluwe Sri Sumangala Thero, Maha Nayaka of Rangiri Dambulla Chapter of Siyam Maha Nikaya started offering higher ordination to Bhikkhunis in 1998 but state recognition became a sore point. When Venerable Welimada Dhammadinna Bhikkhuni was denied official recognition as a Bhikkhuni on her national identity card she filed action, with the support of Ven. Inamaluwe Sri Sumangala Thero. In a landmark majority judgement delivered on 16 June, the Supreme Court ruled that the fundamental rights of Ven. Dhammadinna were breached and also Bhikkhuni Sasana was re-established in Sri Lanka. As this judgement did not receive wide publicity, I wrote a piece titled “Buddhism, Bhikkhus and Bhikkhunis” (The Island, 10 July 2025) and my wish for this Unduvap Poya is what I stated therein:

“The landmark legal battle won by Bhikkhunis is a victory for common sense more than anything else. I hope it will help Bhikkhuni Sasana flourish in Sri Lanka. The number of devotees inviting Bhikkhunis to religious functions is increasing. May Bhikkhunis receive the recognition they richly deserve.” May there be a rapid return to normalcy from the current tragic situation.”

by Dr Upul Wijayawardhana

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Opinion

Royal Over Eighties

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Royal College

The gathering was actually of ‘Over Seventies’ but those of my generation present were mostly of the late eighties.

Even of them I shall mention only those whom I know at least by name. But, first, to those few of my years and older with whom speech was possible.

First among them, in more sense than one, was Nihal Seneviratne, at ninety-one probably the oldest present. There is no truth to the story that his state of crisp well-being is attributable to the consumption of gul-bunis in his school days. It is traceable rather to a life well lived. His practice of regular walks around the house and along the lane on which he lives may have contributed to his erect posture. As also to the total absence of a walking stick, a helper, or any other form of assistance as he walked into the Janaki hotel where this gathering took place.

Referencing the published accounts of his several decades-long service in Parliament as head of its administration, it would be moot to recall that his close friend and fellow lawyer, J E D Gooneratne, teased him in the following terms: “You will be a bloody clerk all your life”. He did join service as Second Assistant to the Clerk to the House and moved up, but the Clerk became the Secretary General. Regardless of such matters of nomenclature, it could be said that Nihal Seneviratne ran the show.

Others present included Dr. Ranjith de Silva, Surgeon, who was our cricket Captain and, to the best of my knowledge, has the distinction of never engaging in private practice.

The range of Dr. K L (Lochana) Gunaratne’s interests and his accomplishments within each are indeed remarkable. I would think that somebody who’d received his initial training at the AA School of Architecture in London would continue to have architecture as the foundation of his likes /dislikes. Such would also provide a road map to other pursuits whether immediately related to that field or not. That is evident in the leadership roles he has played in the National Academy of Sciences and the Institute of Town Planners among others. As I recall he has also addressed issues related to the Panadura Vadaya.

My memories of D L Seneviratne at school were associated with tennis. As happens, D L had launched his gift for writing over three decades ago with a history of tennis in Sri Lanka (1991). That is a game with which my acquaintance is limited to sending a couple of serves past his ear (not ‘tossing the ball across’ as he asked me to) while Jothilingam, long much missed, waited for his team mates to come for practices. It is a game at which my father spent much time both at the Railway sports club and at our home-town club. (By some kind of chance, I recovered just a week ago the ‘Fred de Saram Challenge Cup’ which, on his winning the Singles for the third time, Koo de Saram came over to the Kandana Club to hand over to him for keeps. They played an exhibition match which father won). D L would know whether or not, as I have heard, in an exhibition match in Colombo, Koo defeated Frank Sedgman, who was on his triumphant return home to Oz after he had won the Wimbledon tournament in London.

I had no idea that D L has written any books till my son brought home the one on the early history of Royal under Marsh and Boake, (both long-bearded young men in their twenties).

It includes a rich assortment of photographs of great value to those who are interested in the history of the Anglican segment of Christian missionary activity here in the context of its contribution to secondary school education. Among them is one of the school as it appeared on moving to Thurstan road from Mutwal. It has been extracted from the History of Royal, 1931,  done by students (among whom a relative, Palitha Weeraman, had played a significant role).

As D L shows, (in contra-distinction to the Catholic schools) the CMS had engaged in a largely secular practice. Royal remained so through our time – when one could walk into the examination room and answer questions framed to test one’s knowledge of Christianity, Buddhism, Hinduism and Islam; a knowledge derived mostly from the lectures delivered by an Old Boy at general assembly on Friday plus readings from the Dhammapada, the Bhagavad Gita, the St. John’s version of the Bible or the Koran recited by a student at senior assembly on Tuesday / Thursday.

 D L’s history of Royal College had followed in 2006.

His writing is so rich in detail, so precise in formulation, that I would consider this brief note a simple prompt towards a publisher bringing out new editions at different levels of cost.

It was also a pleasure to meet Senaka Amarasinghe, as yet flaunting his Emperor profile, and among the principal organisers of this event.

The encounter with I S de Silva, distinguished attorney, who was on Galle road close to Janaki lane, where I lived then was indeed welcome. As was that with Upali Mendis, who carried out cataract surgery on my mother oh so long ago when he was head of the Eye Hospital. His older brother, L P, was probably the most gifted student in chemistry in our time.

Most serendipitous perhaps was meeting a son of one of our most popular teachers from the 1950s, – Connor Rajaratnam. His cons were a caution.

by Gamini Seneviratne

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Opinion

“Regulatory Impact Assessment – Not a bureaucratic formality but essentially an advocacy tool for smarter governance”: A response

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Having meticulously read and re-read the above article published in the opinion page of The Island on the 27 Nov, I hasten to make a critical review on the far-reaching proposal made by the co-authors, namely Professor Theekshana Suraweera, Chairman of the Sri Lanka Standards Institution and Dr. Prabath.C.Abeysiriwardana, Director of Ministry of Science and Technology

The aforesaid article provides a timely and compelling critique of Sri Lanka’s long-standing gaps in evidence-based policymaking and argues persuasively for the institutional adoption of Regulatory Impact Assessment (RIA). In a context where policy missteps have led to severe economic and social consequences, the article functions as an essential wake-up call—highlighting RIA not as a bureaucratic formality but as a foundational tool for smarter governance.

One of the article’s strongest contributions is its clear explanation of how regulatory processes currently function in Sri Lanka: legislation is drafted with narrow legal scrutiny focused mainly on constitutional compliance, with little or no structured assessment of economic, social, cultural, or environmental impacts. The author strengthens this argument with well-chosen examples—the sudden ban on chemical fertilizer imports and the consequences of the 1956 Official Language Act—demonstrating how untested regulation can have far-reaching negative outcomes. These cases effectively illustrate the dangers of ad hoc policymaking and underscore the need for a formal review mechanism.

The article also succeeds in demystifying RIA by outlining its core steps—problem definition, option analysis, impact assessment, stakeholder consultation, and post-implementation review. This breakdown makes it clear that RIA is not merely a Western ideal but a practical, structured, and replicable process that could greatly improve policymaking in Sri Lanka. The references to international best practices (such as the role of OIRA in the United States) lend credibility and global context, showing that RIA is not experimental but an established standard in advanced governance systems.

However, the article could have further strengthened its critique by addressing the political economy of reform: the structural incentives, institutional resistance, and political culture that have historically obstructed such tools in Sri Lanka. While the challenges of data availability, quantification, and political pressure are briefly mentioned, a deeper analysis of why evidence-based policymaking has not taken root—and how to overcome these systemic barriers—would have offered greater practical value.

Another potential enhancement would be the inclusion of local micro-level examples where smaller-scale regulations backfired due to insufficient appraisal. This would help illustrate that the problem is not limited to headline-making policy failures but affects governance at every level.

Despite these minor limitations, the article is highly effective as an advocacy piece. It makes a strong case that RIA could transform Sri Lanka’s regulatory landscape by institutionalizing foresight, transparency, and accountability. Its emphasis on aligning RIA with ongoing national initiatives—particularly the strengthening of the National Quality Infrastructure—demonstrates both pragmatism and strategic vision.

At a time, when Chairmen of statutory bodies appointed by the NPP government play a passive voice, the candid opinion expressed by the CEO of SLSI on the necessity of a Regulatory Impact Assessment is an important and insightful contribution. It highlights a critical missing link in Sri Lanka’s policy environment and provides a clear call to action. If widely circulated and taken seriously by policymakers, academics, and civil society, it could indeed become the eye-opener needed to push Sri Lanka toward more rational, responsible, and future-ready governance.

J. A. A. S. Ranasinghe,
Productivity Specialty and Management Consultant
(rathula49@gmail.com)

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