You are here: Home » Companies » News
Business Standard

Adani Group frontrunner for developing Sri Lanka's port terminal: Report

Adani Ports and Special Economic Zone and a local partner received an in-principle approval to sign a deal with Sri Lanka Ports Authority, which will hold majority stake in the project

Topics
Adani Group | sri lanka

Archana Chaudhary P R Sanjai & Asantha Sirimanne | Bloomberg 

Adani Group, Port
Adani, India’s biggest ports and logistics company, had signed a preliminary agreement for the project last year

India’s is the front-runner to develop Sri Lanka’s stalled East Container Terminal in Colombo port, people with knowledge of the matter said, helping billionaire Gautam Adani expand his port business overseas.

Adani Ports and Special Economic Zone Ltd. and a local partner received an in-principle approval to sign a deal with Ports Authority, which will hold majority stake in the project, the people said, asking not to be identified citing rules for speaking with the media.

Details of the stake holding are still being worked out after a review of the project following labor protests that had stalled the deal before parliamentary elections in August, they said. India’s foreign ministry and the didn’t immediately respond to requests seeking comments.

Adani, India’s biggest ports and logistics company, had signed a preliminary agreement for the project last year.

Work on reviving the project, being jointly developed by Sri Lanka, India and Japan, comes at a time of rising regional tensions with China. Both India and Japan are members of the informal Quad grouping that along with U.S. and Australia is seen as a counter to Beijing’s influence in the Indo-Pacific region.

While the deal was agreed upon last year, President Gotabaya Rajapaksa had announced a review after protests by labor unions who feared foreign control over the strategic project, according to reports. The island nation had earlier depended heavily on China for its infrastructure development in the first half of this decade, creating tensions with New Delhi.

The neighbors began rebuilding trade and investment ties before the coronavirus pandemic struck. In July, India extended a $400 million currency swap facility to Colombo to assist with post-pandemic economic recovery. The two countries also discussed deferring of debt repayment during Prime Minister Mahinda Rajapaksa’s first high-level virtual meeting since his re-election with India’s Narendra Modi in September.

-- which emerged from a three-decade civil war in 2009 -- was known for taking Chinese loans to fund vast infrastructure projects, including ports and highways, that eventually became part of Beijing’s Belt and Road Initiative. Its appetite for Chinese cash waned after rising debt forced it to sell the Hambantota port back to China Merchants Port Holdings.

Meanwhile, the country’s port authority last week started operations at parts of the East Container Terminal that it has already built, said Chairman Daya Ratnayake.

The agreement signed between Sri Lanka’s former government with India and Japan “is still on,” he said. The Sri Lankan government “is in discussions on how to operationalise it.”

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, November 03 2020. 15:07 IST
RECOMMENDED FOR YOU
.