Sri Lanka starts building $700 mln port project funded by India's Adani

China Merchants Port Holdings

09/11/2022 10:46

By Uditha Jayasinghe
       COLOMBO, Nov 9 (Reuters) - Sri Lanka's largest port
began on Wednesday construction of a $700 million terminal
project, partly funded by India's Adani Group, an official said,
marking the first foray by an Indian company into the sector.
    India has this year provided the most financial support to
its southern neighbour, which is facing its worst economic
crisis in more than seven decades. India is now keen to see
long-term projects by Indian companies take off in Sri Lanka.
    "Dredging commenced in the morning," Upul Jayatissa,
managing director of the state-run Sri Lanka Ports Authority
(SLPA), told Reuters.
    "The first stage is expected to be done in the third quarter
of 2024 and the full project will be completed by 2025-end."    
    Ports-to-edible oils group Adani, controlled by Asia's
richest person, Gautam Adani, holds a 51% stake in the West
Container Terminal (WCT) of the port, which also has a terminal
run by China Merchants Port Holdings Co Ltd  0144.HK .
    India and China vie for influence in the island nation of 22
million, located near busy shipping routes.
    Sri Lankan conglomerate John Keells Holdings owns 34% of the
WCT and the rest is held by the SLPA.
    The Adani Group's plans to invest in Sri Lanka's ports ran
into controversy last year after powerful port unions pushed for
the East Container Terminal (ECT) to be built by the state.
Subsequently, the government excluded the company from
construction of the ECT.  
    However, in September the Sri Lankan government of Ranil
Wickremesinghe, who became president in July, signed a new deal
with the group for the west terminal in a different part of the
port.
    The ECT is now being constructed by SLPA and will be
completed in December 2024, Jayatissa said.
    India has extend about $4 billion including swaps and
multiple credit lines to Sri Lanka, amid an acute shortage of
dollars and essentials.
 (Reporting by Uditha Jayasinghe; Editing by Robert Birsel)
 ((Uditha.Jayasinghe@thomsonreuters.com;))