Sri Lanka’s biggest port began construction on Wednesday on a $700 million terminal project, partly funded by India’s Adani Group, an official said, marking the first foray of an Indian company into the sector.
This year, India has provided the most significant financial support to its southern neighbour, facing its worst economic crisis in more than seven decades. India wants to see long-term projects of Indian companies in Sri Lanka take off.
“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 per cent stake in the West Container Terminal (WCT) of the port, which also has a terminal run by China Merchants Port Holdings Co Ltd.
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 per cent of the WCT, and the SLPA holds the rest.
The Adani Group’s plans to invest in Sri Lanka’s ports were controversial last year after powerful port unions pushed for the state’s building of the East Container Terminal (ECT). Subsequently, the government excluded the company from the 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 port part.
The ECT is now being constructed by SLPA and will be completed in December 2024, Jayatissa said.
India has extended about $4 billion, including swaps and multiple credit lines, to Sri Lanka amid an acute shortage of dollars and essentials