Japan and India to develop Colombo Port, countering Belt and Road

(FASTNEWS|COLOMBO) – The Governments of Japan, India, and Sri Lanka have agreed to jointly develop the Port of Colombo, Nikkei Asian Review has learned, as the Indian Ocean becomes more integral to global trade.

The project’s goals are to increase the Port’s container volume and enhance marine transportation in and around South Asia.

The deal comes as China has been using Belt and Road projects to increase its influence in the region, and with Japan aspiring to play a significant role in the area pushing its Free and Open Pacific Ocean and Indian Ocean strategy.

The 3 partners will sign a Memorandum of Understanding (MOU) by summer, and work will begin by next March.

The largest port in Sri Lanka, through which 90 per cent of the country’s seaborne goods pass, connects Europe, the Middle East, Africa, and Asia. It had traffic of 6.21 million 20-foot equivalent units in 2017, making it South-West Asia’s busiest port. But the region’s economies continue to boom and are expected bring the port to full capacity.

The 3 countries will develop the East container terminal, located at the South part of the Port of Colombo, which has been newly expanded. They will deepen it and develop a facility to allow large container ships to enter.

Government Officials from the 3 countries are in working-level talks and expect to agree on the scale and form of the project by summer.

Corporate partners will also be brought on board.

Japanese Official Development Assistance will finance a portion of the project.

The move comes as China has been enhancing its influence in and around the Indian Ocean. Western Governments have often criticised the power dynamics in the region, saying Sri Lanka handed over its Southern Port of Hambantota to China on a 99-year lease after it fell into a debt trap. Similar criticisms have been levelled against Chinese projects in the Maldives.

The Japanese Government is also concerned. A Japanese Government source said, “If the development of the Port of Colombo takes time, cargo might be transferred to Hambantota.”

Some of Japan’s primary maritime routes run through the Indian Ocean, so improved capacity of the region’s ports will improve the security of tankers and commercial ships.