Sri Lanka at the centre of competing infrastructure spending strategies as Indian Ocean increasingly becomes important maritime route
Japan and India are co-developing Sri Lanka’s biggest port in efforts to partake in growing marine trade routes in the Indian Ocean.
The three governments will ink a memorandum of understanding by summer to build the east container terminal at the Port of Colombo, Bloomberg has learned, citing an unnamed Indian government official.
Work on the port could begin in March 2020, with India expected to provide easy credit. Japan and India will also seek private sector investment and a terminal operator after the framework agreement is signed.
The move is seen as a counterbalance to China’s growing hegemony in the waters around South Asia. Sri Lanka was forced to lease the port of Hambantota in the island’s south to China for 99 years due to debt trap.
“If the development of the Port of Colombo takes time, cargo might be transferred to Hambantota,” a concerned Japanese government official told the Nikkei Asian Review.
Japan is currently promoting its Free and Open Pacific Ocean and Indian Ocean strategy, which has drawn comparisons to China’s own Belt and Road initiative of overseas infrastructure spending sprees.
The Colombo port is a strategic maritime destination linking Europe, the Middle East, Africa and Asia: through which a traffic of 6.21 million twenty-foot equivalent units passed in 2017.
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