India counters China in Sri Lanka with US$700 million port deal

A new terminal will be built next to a US$500-million Chinese-run jetty, in what local authorities call the largest investment ever in the country’s port sector

India’s Adani Group will hold a 51 per cent controlling stake in the joint venture known as the Colombo West International Terminal

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India and the US are concerned that a Chinese foothold at Sri Lanka’s Hambantota port could give Beijing a military advantage in the Indian Ocean. Photo: AFP

Published: 6:30am, 1 Oct 2021

An Indian company entered into a US$700 million deal Thursday to build a strategic deep-sea container terminal in Sri Lanka, officials said, in a move seen as countering China’s rising influence in the region.

The Sri Lanka Ports Authority (SLPA) said it signed an agreement with India’s Adani Group to build a new terminal next to a US$500-million Chinese-run jetty at the sprawling port in the capital Colombo.

“The agreement worth more than US$700 million is the largest foreign investment ever in the port sector of Sri Lanka,” the SLPA said in a statement.

It said Adani will enter into a partnership with a local conglomerate, John Keells, and the Sri Lankan government-owned SLPA as a minority partner.

Pumps dredge sand at a Chinese-funded reclamation site next to Colombo’s main seaport in January 2018. Photo: AFP

John Keells said it will have 34 per cent of the company while Adani will have a 51 per cent controlling stake in the joint venture known as the Colombo West International Terminal.

The new container jetty will be 1.4km in length, with a depth of 20 metres and an annual capacity to handle 3.2 million containers.