Sri Lanka has awarded the contract for developing the second phase of the East Coast Terminal (ECT) of Colombo Port to China Harbour Engineering Company (CHEC). Earlier, the port was to be developed jointly by Sri Lanka, India, and Japan in a deal Sri Lanka President Mahinda Rajapaksa had canceled earlier this year. 

On Tuesday, after holding a cabinet meeting, the government approved the development of the strategic port terminal in stages. However, unlike the previous joint deal with India and Japan, the Chinese firm won’t get operational rights.  It will be “totally operated” by the Sri Lanka Ports Authority, the government said. 

CHEC, which is already engaged with multiple projects in the island nation, is a subsidiary firm of a Chinese state-owned company. The Colombo Port City and a four-lane elevated highway in the country are among the projects CHEC is already undertaking. 

Over the years, Chinese companies have strengthened their grip in many Sri Lankan infrastructure projects--a trend India, Colombo's closest partner, remains warry of. 

Recently, Chinese projects have also witnessed popular domestic opposition as many in the country accused the Rajapaksa government of turning parts of Sri Lanka into “Chinese colonies.” Latest being the Sri Lanka Colombo Port City bill which witnessed massive pushback from political parties as well as the judiciary which advised the government to tone down provisions giving sweeping favor to Chinese contractors undermining local authorities. 

After scrapping the 2019 ECT tripartite agreement, Colombo granted  India’s Adani Group the West Coast Terminal (WCT) Port deal. Both parties last month had a deal for $700 million on the WCT. 

(SAM)