China-backed Colombo Port City Project creates ripples

COLOMBO : A Invoice handed by the Sri Lankan Parliament has created ripples among the many maritime fraternity in Tamil Nadu  (TN) and Kerala. The controversial Colombo Port Metropolis Financial Fee Invoice, cleared final month, governs the China-backed Colombo Port Metropolis mission price $1.4 billion.

There’s concern in India on the possible affect of the mission on ports in TN and Kerala, particularly in view of the truth that Chinese language buyers are concerned within the Sri Lanka mission. The Port Metropolis shall be unfold throughout 660 acres of reclaimed land to be developed as a Particular Financial Zone (referred to as the Colombo Port Metropolis SEZ), for facilitating investments and enterprise in Sri Lanka with emphasis on the service economic system, says a report on the mission web site.

The maritime fraternity within the two Indian states — which have a robust reference to Colombo port, which acts as a significant transshipment port within the area — is anxious about monetary implications.

The largest fear is that the mission could begin with SEZ and later increase into the port sector and begin the diversion of cargo from India to China.

A powerful concerted effort is required from the Indian aspect to counter the mission, stakeholders stress. Southern Ports of India will face stiff competitors from Colombo. The Colombo Port at present operates with captive transshipment quantity from India, which shall be affected in the long term, says Ennarasu Karunesan, Founder & CEO, UMK Group, a logistics consultancy agency, on the affect of the Port Metropolis mission.

The mission permits China to widen its base in Sri Lanka by including to a well-established Chinese language-led port working within the island nation. India has been trying to safe a port mission in Sri Lanka for lengthy, however China was faster, he mentioned.

‘Provocative improvement’

“It’s extra of an SEZ and business metropolis like Dubai or Singapore however managed by China. The state of affairs of southern ports relying on Colombo for transshipment is not going to change due to this improvement. Nonetheless, India doesn’t have a solution to this provocative improvement,” an official of a number one transport line mentioned.

Sai Krishna, Assistant Vice President, ICRA Ltd, mentioned Chinese language corporations have already got a modest share of cargo in Sri Lanka as they’re operating a container terminal in Colombo port and likewise management the Hambantota port. Sri Lankan Port Authority has additionally been operating the container terminals efficiently with a aggressive tariff construction and good infrastructure, due to which India has not been in a position to make a lot headway in attracting transshipment cargo.

Colombo will additional acquire benefit within the transshipment enterprise as a consequence of price elements as soon as the SEZ mission materialises, mentioned the previous chairman of a state-run port. “Nonetheless, India will benefit from attracting cargo aside from transshipment due to the burgeoning home market,” he added.

“Even earlier than the Chinese language investments, the Indian port sector, particularly within the South-Japanese area, couldn’t considerably affect the monopoly of Colombo within the transshipment enterprise,” mentioned Suresh Joseph, a logistics advisor.

Aside from Mundra and Jawaharlal Nehru ports within the Western area, it could be helpful to make an analysis on how ports in Southern area carried out in attracting transshipment enterprise whereas competing with the island nation, Joseph mentioned.

“We couldn’t even leverage the potential of Vallarpadam terminal, particularly set as much as vie with Colombo Port, in wooing transshipment cargo,” he added.

Chinese language investments in Sri Lanka can be an element for India strategically, he mentioned. The proposed facility, Joseph added, may very well be developed as a naval port, thereby strengthening Chinese language presence within the Indian Ocean.

Source : The Hindu Business Line