October 12, 2012
Reposted from the Economic Times
Sri Lanka Ports Authority (SLPA), controlled by the Sri Lankan government, is in talks with Indian port companies to form consortiums to invest in Indian port projects, said people familiar with the development.
Some officials of the Sri Lankan port authority say the company has already identified projects to invest in India and is looking to bid for a number of upcoming projects. This is also the first time that Sri Lanka has shown willingness to invest in Indian projects.
“We are in talks with a few Indian companies to partner us for investing in projects in India. We are interested in many of the port projects that the Indian government is planning such as the fourth container terminal at JNPTand others,” SLPA’s chairman Priyath Wickrama told ET.
Industry experts and shipping ministry officials, however, fear that getting security clearance for the projects will be tough and there could be an element of suspicion that Sri Lanka might try to hamper the growth of the Indian port sector.
“It’s premature at the moment. But if they manage to bid for projects, they will have to receive clearance from various ministries and that could be a challenge, especially since China is the biggest investor in port projects in Sri Lanka,” said a senior official at the ministry of shipping.
Industry experts say that the move to invest in India should not be seen as something positive since Sri Lanka remains India’s biggest competitor in the Indian sub-continent region.
“The new transshipment hub in Cochin and Vizhinjam Port are seen as direct competition to Colombo Port, which has been expanding largely due to the cargo from India.
In such a scenario, there’s no valid reason for Sri Lanka to invest in Indian port projects as it would only hamper their projects. There could be ulterior motive behind their intention,” said Hemant Bhattbhatt, senior director atDeloitte Touche Tohmatsu.
Experts also point to the recent developments at JNPT, where the Singapore government offered to build a fourth container terminal and eventually exited the project causing delay at the port, but in the process, helped cargo flow to Singapore port due to congestion at the Indian ports.
“Much like the PSA-ABG deal at JNPT which cost the port time in developing the project and now forcing to go for a re-bid, the intention of the Sri Lanka ports needs to be ascertained clearly if they were to bid for projects in India,” added BhattBhatt.
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