India’s Adani Ports and Special Economic Zone Limited has been offered a 39% stake in the Eastern Container Terminal (ECT) while its local partner would have a 10% stake, together making it 49% in the ECT investment, according to details now emerging on the proposed ECT deal with the Indian company.
The workers’ union of the Sri Lankan Port Authority (SLPA) has alleged that the government of India headed by Prime Minister Narendra Modi is putting undue pressure on the island-nation to hand over the development and operation of a major Colombo port terminal to the Adani Group.
The balance 51% will be retained by the Sri Lanka Ports Authority (SLPA).
Adani's stake will be under a build-own-operate-transfer (BOOT), a form of project delivery method which has been proposed by the Indian government authorities.
Trade unions are opposing the provision of a 49% stake to the Indian company while the government has already made its position clear by stating that the Indian company would be invited to invest in the ECT.
According to highly-placed officials involved in the process, India will provide Sri Lanka with a currency swap of USD 1 billion while another USD 500 million will come in as Adani’s investment in the ECT.
The Adani funds will be channeled to the Treasury which will use the total (USD 1.5 billion) partly for boosting Sri Lanka’s foreign reserves and USD 500 million to be loaned to the SLPA for the ECT work.
This mechanism has been devised to receive the money from the lease deal from India to the treasury and the loan facility for the ECT should be repaid in installments with interest by the Ports Authority.
Adani Ports and Special Economic Zone Limited 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.
However, this was denied by the Chairman of Ports Authority, General (Retd) Daya Ratnayake claiming that nothing has been finalised.
He disclosed that ECT has already started operations at parts of the East Container Terminal that it has already built.
The Adani funds will be channeled to the Treasury which will use the total (USD 1.5 billion) partly for boosting Sri Lanka’s foreign reserves and USD 500 million to be loaned to the SLPA for the ECT work.
This mechanism has been devised to receive the money from the lease deal from India to the treasury and the loan facility for the ECT should be repaid in installments with interest by the Ports Authority.
Adani Ports and Special Economic Zone Limited 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.
However, this was denied by the Chairman of Ports Authority, General (Retd) Daya Ratnayake claiming that nothing has been finalised.
He disclosed that ECT has already started operations at parts of the East Container Terminal that it has already built.
Details of the stakeholding are still being worked out after a review of the project following protests of port workers that had stalled the deal.
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