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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

LG polls, what a waste of money!

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If the people of this country were asked whether they want elections to the local government, majority of them would say no! How many years have elapsed since the local councils became defunct? And did not the country function without these councils that were labelled as ‘white elephants’?

If the present government’s wish is to do the will of the people, they should reconsider having local government elections. This way the government will not only save a considerable amount of money on holding elections, but also save even a greater amount by not having to maintain these local councils, which have become a bane on the country’s economy.

One would hope that the country will be able to get rid of these local councils and revert back to the days of having competent Government Agents and a team of dedicated government officials been tasked with the responsibility of attending to the needs of the people in those areas.

M. Joseph A. Nihal Perera

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Opinion

What not to do

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Trump and Zelensky arguing in the White House

By Dr Upul Wijayawardhana

It is immaterial whether you like him or not but one thing is crystal clear; Donald Trump has shown, very clearly, who is the boss. Surely, presidents of two countries are equal; perhaps, that is the impression Volodymyr Zelensky had when he went to the White House to meet Trump but the hard reality, otherwise, would have dawned on him with his inglorious exit! True, the behaviour of President Trump and VP Vance were hardly praiseworthy but Zelensky did what exactly he should not do. Afterall, he was on a begging mission and beggars cannot be choosers! He behaved like professional beggars in Colombo who throw money back when you give a small amount!!

Despite the risk of belonging to the minority, perhaps of non-Americans, I must say that I quite like Trump and admire him as a straight-talking politician. He keeps to his words; however atrocious they sound! Unfortunately, most critics overlook the fact that what Trump is doing is exactly what he pledged during his election campaign and that the American voters elected him decisively. When he lost to Biden, all political commentators wrote him off, more so because of his refusal to admit defeat and non-condemnation of his supporters who rioted. When he announced his intention to contest, it only evoked pundits’ laughter as they concluded that the Republican Party would never nominate him. Undaunted, Trump got the party to rally round him and won a non-consecutive second term; a feat achieved only once before, by Grover Cleveland around the end of the nineteenth century. His victory, against all predictions, was more decisive as he got more collegiate votes and, even though it does not matter, won the popular vote too which he did not get when he got elected the first term. Even his bitterest critics should accept this fact.

Zelensky was elected the president of Ukraine after the elected pro-Soviet president was deposed by a ‘peoples revolution’ engineered by the EU with the support of USA. After this, the EU attempted to bring Ukraine to NATO, disregarding the Munich agreement which precipitated the Russian invasion. He should have realised that, if not for the air-defence system which Trump authorised for Ukraine during his first term, Russian invasion would have been complete. It may well be that he was not aware as when this happened Zelensky may still have been the comedian acting the part of the president! Very likely, Trump was referring to this when he accused Zelensky of being ungrateful.

Zelensky also should have remembered that he disregarded requests from Trump, after his defeat by Biden, to implicate Biden’s son in some shady deals in Ukraine and that one of the last acts of Biden was to pardon his son and grant immunity to cover the alleged period. Perhaps, actions of the European leaders who embrace him every time they see him, as a long-lost brother, and invitations to address their parliaments has induced an element of the superiority complex in Zelensky that he behaved so combative.

Trump wanted to be the mediator to stop the war and spoke to Putin first. Instead of waiting for Trump to speak to him, egged on by EU leaders Zelensky started criticising Trump for not involving him in the talks. His remark “He should be on our side” demonstrated clearly that Zelensky had not understood the role of a mediator. His lack of political experience was the major reason for the fiasco in the White House and the subsequent actions of Trump clearly showed Zelensky where he stands! PM Starmer and President Macron seem to have given some sensible advice and he seems to be eating humble pie. In the process Trump has ensured that the European nations pay for their defence than piggy-backing on the US, which I am sure would please the American voter. By the way, though Macron talks big about defence France spends less than 2% of GDP. Trump seems vindicated. Of course, Trump could be blamed for being undiplomatic but he can afford to be as he has the upper hand!

Ranil on Al Jazeera

Zelensky has shown what not to do: instead of being diplomatic being aggressive when you need favours! Meanwhile, Ranil has shown what not to do when it comes to TV interviews. God only knows who advised him, and why, for him to go ‘Head to Head’ with Mehdi Hasan on Al-Jazeera. Perhaps, he wanted to broadcast to the world that he was the saviour of Sri Lanka! The experienced politician he is, one would have expected Ranil to realise that he would be questioned about his role in making Sri Lanka bankrupt as well, in addition to raising other issues.

The interview itself was far from head to head; more likely heads to head! It turned out to be an inquisition by Tiger supporters and the only person who spoke sense being Niraj Deva, who demonstrated his maturity by being involved in British and EU politics. The worst was the compere who seems keen to listen his own voice, reminding me of a Sinhala interviewer on a YouTube channel whose interviews I have stopped watching!

Ranil claims, after the interview was broadcast, that it had been heavily edited reduced from a two-hour recording. Surely, despite whatever reason he agreed to, he should have laid ground rules. He could have insisted on unedited broadcast or his approval before broadcast, if it was edited. It was very naïve of Ranil to have walked in to a trap for no gain. Though his performance was not as bad as widely reported, he should have been more composed at the beginning as he turned out to be later. Overall, he gave another opportunity for the Tiger rump and its supporters to bash Sri Lanka, unfortunately.

Medhi Hasan should watch some of David Frost interviews, especially the one with Richard Nixon, and learn how to elicit crucial information in a gentle exploratory manner than shouting with repeated interruptions. He does not seem to think it is necessary to give time for the interviewee to respond to his questions. I will never watch Al-Jazeera’s “Head to Head” again!

Ranil’s best was his parting shot; when asked by Hasan whether he would contest the next presidential election, he said “No, I will retire and watch Al-Jazeera and hope to see you better mannered”!

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Opinion

Ajahn Brahm to visit SL in May 2025

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The Ajahn Brahm Society of Sri Lanka (ABSSL) is pleased to announce that Ajahn Brahm will be visiting Sri Lanka for a short stay in May this year. Many, both Buddhists and non-Buddhists, know him and have listened to his addresses made on earlier visits, including his 2023 public talk at the BMICH, which was attended by over 4,000 people.

Ajahn Brahmavamso, popularly known as Ajahn Brahm, is the Head Abbot of Bodhinyana Monastery in Serpentine, Perth. He was a pupil of the famous Thai forest monk Ajahn Chah, considered the best Theravada meditation teacher in the last century. By his own choice, Ajahn Brahmavamso shortened his name and was extra pleased that the initials represent the major religions of the world. He is renowned world-wide as an outstanding meditation bhikkhu, teacher and instructor, guiding thousands of practitioners.

As in previous visits, Ajahn Brahm’s schedule will be packed with addresses, meetings with senior professionals, business leaders, and researchers. This year, a special session has been included for teenagers and young adults.

The agenda planned for him includes:

·

Public address at the BMICH to all irrespective of religion and age; then to a younger audience.

· Exclusive Leadership Forum for senior professionals and business leaders.

· Forum with academics engaged in research at the Centre for Meditation Research, University of Colombo.

· A week-long meditation retreat for the Ven Sangha and experienced lay meditators.

Public Addresses

The public addresses will be on Sunday, May 18, 2025, from 7:00 am to 11:00 am, at the BMICH Main Hall and Sirimavo Halls; Ajahn Brahm moving from one hall to another so the entire audience sees him. Each hall will be well equipped with audio and video presentation. The first address: The Art of Meaningful Living, is designed for all, age notwithstanding, offering wisdom and practical insights for a fulfilling life. The second: Coping with Life Transitions and Emotional Challenges, is a special session tailored for teens and young adults, addressing key challenges faced by them in today’s fast-paced, competitive world. Both talks will be in English, with concise translation to Sinhala by Ven Damita Thera.

Exclusive Forums

On Saturday, May 17, 2025, two exclusive forums will be held at the BMICH Committee Room, Jasmine Hall. The first such session will be with eighty invited Sri Lankan academics and scientists engaged in research on meditation at the Centre for Meditation Research of the University of Colombo. This will be followed in the evening by an interactive session for a hundred invited senior professionals and business leaders, featuring a talk on leadership followed by a Q&A session.

Meditation Retreat

The most significant item on Ajahn Brahm’s programme will be a week-long meditation retreat at the Barberyn Waves Ayurveda Resort in Weligama. Focus is intended to be on the fifty members of the Ven Sangha. A limited number of experienced lay meditators will also have the opportunity to participate.

Participation & Registration

Those interested in attending the public talks at the BMICH are kindly advised to register at to secure free passes. For further information, please contact the Ajahn Brahm Society of Sri Lanka at .

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