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Advocata Institute welcomes SL’s decision to resume stalled project to develop East Container Terminal

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Open and Competitive Bidding must be the way forward

COLOMBO, Sri Lanka— 

As reported in numerous media sources, a leading Indian consortium is the front runner to develop the stalled East Container Terminal (ECT) in the Colombo Port.

An agreement was reached during the tenure of the former government to develop the ECT in collaboration with the governments of India and Japan. However, the progress of the terminal development was stalled due to various reasons. 

The Advocata Institute welcomes the decision of the administration to resume the stalled project. The significance of the Colombo Port is driven by its large volumes of transhipment to India, which now accounts for about 70% of the total quantity of shipments. It is beneficial that both countries continue to strengthen this relationship through trade and economic partnerships. 

However, we would like to provide input on two main policy areas surrounding this project, in order for policymakers and the public to evaluate the efficacy of the upcoming arrangement. 

Accountability through Competitive Bidding 

The key concern of the Government when entering any kind of public-private partnership such as the container terminal development process should be to ensure that it will produce value for money. The commercial partner selected should be the most capable of producing this outcome. An open tender process would allow for a more efficient allocation of resources by using competitive pricing as a tool to reflect real market sentiments and allowing better utilization of resources.  

 

Tax concessions 

The ECT provides an unique competitive advantage for the operator. The risk in this investment is relatively low, given that the port is already established. The Southport (deepwater port) is well known and has been in existence for 6-7 years. The port is also strategically located with only a 4-hour deviation from the major east-west shipping route. Additionally, its competitor, the CICT terminal is running close to capacity.

Finally, there is a very limited employment multiplier effect that this project can create. The private returns are significantly higher than the cost of capital factoring in-country and project risk.  Taken together and based on the publicly available information, the case for tax holidays on this project is weak.

Further consideration must also be placed on the precarious fiscal situation that the country is presently in and the need to mobilise more tax revenue.

The Advocata Institute calls upon the government to strengthen oversight and accountability through an open tender process. We believe that such a policy direction would be more conducive to reaching the administration’s vision of a more productive and prosperous Sri Lanka. (Advocata Press Release)



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Some VIP security units disbanded, special ‘motivation incentive allowance’ abolished, with some exceptions

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AVM Thuyakontha

Defence Secy. assures regular entitlements won’t be curtailed

Defence Secretary retired Air Vice Marshal Sampath Thuyakontha has assured the armed forces that contrary to claims, reports and speculation, the NPP government will not curtail various entitlements provided to them.

The declaration was made at the Sri Lanka Air Force (SLAF) Headquarters at the Defence Headquarters Complex, Pelawatte, on Monday (Oct 07).

AVM Thuyakontha, who was in the centre of controversy in the run-up to the presidential election over his support for Anura Kumara Dissanayake’s candidature and blacklisted by the SLAF, visited several divisions of Air Force HQ accompanied by the Air Force Commander Air Marshal Udeni Rajapaksa and other senior officers.

Military Liaison Officer of the Ministry of Defence, Air Vice Marshal Padman de Costa also joined the Defence Secretary on his visit to the Air Force HQ.

During the war, Thuyakontha served as the Commanding Officer of the famed 09 Squadron consisting of Mi-24 helicopter gunships.

AVM Thuyakontha reiterated the government’s commitment to the general welfare of the armed forces.

However, the government has declared that what is called ‘motivation incentive allowance’ paid to security forces personnel attached to security units of former VIPs was stopped from Sept. 22, the day after the presidential election.

The Defence Ministry has informed the Army, Navy and Air Force commanders that there was no requirement for ‘motivation incentive allowance’ as the provision of such security has been discontinued.

According to the Defence Ministry, only security units attached to the Chief of Defence Staff, three service commanders and former presidents would continue to receive the special allowance. (SF)

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US strengthens SLAF maritime surveillance squadron

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File picture of Beechcraft King Air 360ER

The SLAF will officially take delivery of Beechcraft King Air 360ER aircraft, donated by the United States at the Katunayake airbase.

The US Embassy in Colombo said that funded by the U.S. Department of Defense’s Building Partner Capacity programme was part of a long-term collaboration with the Sri Lanka Air Force.

“This advanced aircraft is designed to enhance Sri Lanka’s capabilities in search and rescue operations, drug interdiction, and combating trafficking and smuggling. It will also significantly improve the country’s maritime surveillance operations while reinforcing U.S.-Sri Lanka defense cooperation,” the Embassy said.

The Beechcraft King Air 360ER is equipped with cutting-edge technology to boost Sri Lanka’s ability to patrol its waters and address maritime threats.

The aircraft would be assigned to the Number 03 Maritime Squadron based in China Bay, Trincomalee. The squadron comprises Indian and American surveillance aircraft and would be joined before end of this year by an aircraft donated by Australia.

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FDI depends on transparency and ‘streamlined policies’

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President Dissanayake and Ambassador Lee

– South Korean envoy

South Korean Ambassador Miyon Lee has assured President Anura Kumara Dissanayake of their readiness to resume investments here.

A statement issued by ROK Embassy in Colombo quoted Ambassador Lee as having reaffirmed willingness among Korean companies to recommence investments in Sri Lanka and expressed expectations on Sri Lanka’s commitment towards maintaining transparency and streamlined policies to attract Foreign Direct Investment for the country.

Ambassador Lee discussed the issue when she paid a courtesy call on President Dissanayake yesterday (09) at the Presidential Secretariat.

During the meeting, Ambassador Lee congratulated President Dissanayake on his inauguration and also conveyed best wishes from President Yoon Suk Yeol and his expectations to bolster the relationship between the two countries under the new leadership.

Ambassador Miyon Lee expressed the Korean government’s unwavering support to Sri Lanka with the continuation of people-to-people exchanges, cooperation in education, health and various other sectors. While expressing Korea’s intention to collaborate on digitalization, climatic change initiatives and in the renewable energy sector, she elaborated the role of the Korean government agencies such as KOICA, KOFIH and Saemaul Foundation working in Sri Lanka and called for Sri Lankan government’s continued support for various activities steered by these agencies in this country.

In line with the commitments set out by the International Monetary Fund, the Ambassador wished Sri Lanka for a successful Debt Restructuring Programme and emphasized the commitments by Korea Exim Bank to renew the framework agreement for loan projects to Sri Lanka.

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