On September 30, Adani Group will finalize the Colombo Port agreement. The Adani Group will sign a build-operate-transfer (BOT) agreement with its local partner John Keells Holdings and the Sri Lanka Port Authority (SLPA) today in Colombo, Sri Lanka, to jointly develop its West Container Terminal (WCT).
While the Adani Group has been in dialogue with John Keells, one of Sri Lanka’s largest conglomerates, about aspects of the project and a possible schedule for execution, officials in Colombo who are acquainted with the negotiations say Thursday’s agreement will bear detail information of the project’s execution. The signature will be done virtually.
President Gotabaya Rajapaksa confirmed the Adani Group’s participation in the WCT earlier this year, after controversially excluding India and Japan from the East Container Terminal (ECT) project due to labor union and Buddhist monk opposition to “foreign intervention” in national assets. The collapse of the tripartite agreement on the ECT project was a major source of tension in bilateral relations, with New Delhi concerned that Colombo would back out of a 2019 commitment. Tokyo expressed its dissatisfaction as well.
The WCT project was billed by Colombo as a “compromise,” with India’s position in the project being “strictly private sector,” thanks to Adani Group’s investment, as opposed to the intended ECT, which would have required government involvement.
Gautam Adani, chairman of the Adani Group, confirmed the project in a tweet in March 2021, saying, “Grateful to the leaders of GoI, GoSL, SLPA & John Keells for the opportunity to build WCT, Colombo.” This collaboration is a symbol of the profound strategic ties that exist between two countries with long histories. It will pave the way for decades of container expansion.”
Aside from the obvious strategic importance of the Colombo Port in the Indian Ocean, the Indian rationale for investing in it has been that the Indian market accounts for over 70% of the transhipment business at the Colombo Port.