What's New :
Join Our Open Mentorship Sessions, Register here...
UPSC Interview Guidance Program. Register here...

East Container Terminal (ECT) project

  • Category
    International Relations
  • Published
    18th Aug, 2023


Around two years after Sri Lanka cancelled a joint India-Japan MoU for the East Container Terminal (ECT) project in Colombo, the three countries are studying ways of restarting trilateral cooperation.


  • In 2019, India and Sri Lanka signed a memorandum of understanding (MoU) for “co-operation on economic projects”.
  • The development and operation of the container terminal was one of the projects in the MoU including:
  • a Container Terminal in Colombo Port as a Joint Venture
  • Indian investments considering that majority of transshipment in Colombo Port is related to India
  • The MoU did not mention the Eastern Container Terminal. However, India and Sri Lanka had already been in discussion for its development and operation.
  • However, Last year Sri Lanka withdrew from the agreement.
  • But again all three countries are planning for the revival of ECT project.

About Eastern Container Terminal port:

  • The ECT is located some 3 km away from the China-backed international financial city, known popularly as “port city”, being built on reclaimed land on Colombo’s sea front.

Why Japan is joining the path with India and Sri Lanka?

  • There are two reasons that India had roped Japan into the projects:
  • The East Container Terminal (ECT);
  • An LNG Terminal/Floating Storage Regasification Unit (FSRU) in Kerawalapitiya/Colombo with a piped gas distribution system along with retail outlets for CNG etc.
  • Japan was also the biggest donor to Sri Lanka through the years of conflict.
  • The Geoffrey Bawa-built Sri Lankan parliament, which came up at the height of the conflict, was funded by Japan.
  • It continues to give Sri Lanka substantial financial support even now.
  • However, the old relationship between Sri Lanka and Japan has undergone changes when China’s footprint over Colombo has grown.
  • Late in 2020, the Rajapaksa government unilaterally cancelled a Japanese project for a light rail transit (LRT) project in Colombo.
  • India and Japan share a vision of a Free Open and Inclusive Indo-Pacific (FOIIP), which is of relevance to all countries in the region including Sri Lanka.

What are the terms of the agreement?

  • The Sri Lanka Ports Authority (SLPA) would have 100% ownership of the ECT.
  • The Terminal Operations Company (TOC) conducting all ECT operations was to be jointly owned:
  • Sri Lanka retaining a 51% stake
  • the joint venture partners 49%
  • A 40-year loan at an interest rate of 0.1% from Japan was expected to fund the development of the ECT.
  • The envisaged Japanese loan carries one of the best loan terms Sri Lanka has obtained.
  • The 51% stake is also one of the best in SLPA joint ownership endeavors.

How this project can help India and Japan?

  • Alternative against West Terminal: India had been offered the Western Container Terminal earlier, but had refused.
  • The ECT is already operational, while the WCT has to be built from scratch.
  • Accessibility in Indian Ocean: For India, the ECT deal was important as 60%-70% of transhipment that takes place through it is India-linked.
  • The ECT is also considered more strategic than any other in Colombo Port.
  • Proximity with Chinese developed port: It is located next to the Colombo International Container Terminal (CICT) project, a joint venture between China Merchants Port Holdings Company Ltd. and SLPA.

Verifying, please be patient.

Our Centers

DELHI (Karol Bagh)

GS SCORE, 1B, Second Floor, Pusa Road, Karol Bagh, New Delhi - 110005 (Beside Karol Bagh Metro Station Gate No. 8)

Get directions on Google Maps

BHUBANESWAR (Jaydev Vihar)

GS SCORE, Plot No.2298, Jaydev Vihar Square, Near HCG Day Care, BBSR - 751013

Get directions on Google Maps

LUCKNOW (Aliganj)

GS SCORE, 2nd Floor, B-33, Sangam Chauraha, Sector H, Aliganj, Lucknow, UP - 226024

Get directions on Google Maps

Enquire Now