India’s Adani Group signs deal for Sri Lanka’s West Container Terminal Port, to have 51 percent stake
India's Adani Group has signed a deal worth $700 million with the Sri Lanka Ports Authority (SLPA), the country’s state-owned port firm, and its local partner John Holdings Kneells PVC to develop and run the West Container Terminal (WCT) Port in Colombo
India's Adani Group has signed a deal worth $700 million with the Sri Lanka Ports Authority (SLPA), the country’s state-owned port firm, and its local partner John Holdings Kneells PVC to develop and run the West Container Terminal (WCT) Port in Colombo. As the first-ever Indian port operator in Sri Lanka, Adani Group will have a 51 percent stake at the port's Western Container Terminal (WCT), the company said in a statement on Thursday. The agreement, which is a build-operate-transfer (BOT) agreement with its local partner John Keells Holdings and the SLPA was signed in a virtual ceremony.
The rest two would hold 34 and 15 percent stakes of the new joint company titled the West Container International Terminal.
The Colombo Port is one of the most preferred regional hubs for transshipment of Indian containers and mainline ship operators with 45 percent of Colombo's transshipment volumes originating from or destined to an Adani Ports and Special Economic Zone (APSEZ) terminal in India.
The Adani Group is a diversified multinational conglomerate with a market cap of over $115.23 billion, according to the company website, comprising six publicly traded companies. Headquartered in Ahmedabad, Gujarat, it is an infrastructure, energy and transport company with over 17,000 employees across the globe.
Earlier in February 2020, the Sri Lankan government had unilaterally scrapped the 2019 tripartite agreement on the East Container Terminal (ECT), where India and Japan were to jointly develop the ECT. Both countries, also important development partners to Sri Lanka, had expressed their displeasure over the move.
To placate India, Sri Lanka directly negotiates engaged with the Adani group for the WCT deal. India, on the other hand, had distanced itself from the deal, saying it understood that the Sri Lankan authorities independently engaged with the company.
The cancellation of the 2019 ECT deal dealt a severe blow to India-Sri Lanka ties. Importantly, the Sri Lankan government walked away from the deal just a month after Indian External Affairs Jaishakar’s visit to Colombo, where both President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapakshe had given him assurances of sticking to the deal.