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NEW DELHI: Japan and India could soon be developing and operating the Eastern Container Terminal (ECT) at Colombo port, a venture that will be seen as a counter to China, which has the lease to run the Hambantota port for 99 years after Sri Lanka couldn’t clear the debt for its construction and operation.

Sri Lanka’s cabinet is set to approve a tripartite agreement with India and Japan for the ECT. It could be one of the first agreements to be signed by the new government here after results to the Lok Sabha elections are out on Thursday.

Collaboration over the port meets the strategic interests of Japan and India, who are concerned over China’s ambitious plans for the Indian Ocean and Indo-Pacific. The agreement has been at least a couple of years in the making, with a number of twists and turns.

India working to secure its interests in key island nations

Initially, the Sri Lankan government had asked Japan and India to operate the terminal, but later developed cold feet. In negotiations in recent months, Colombo, fresh from the bruising experience of the Hambantota port, asked to retain ownership of the project.

This was agreed to by India and Japan. Sri Lanka will keep 51% ownership, while the rest will be with India and Japan. Sri Lankan finance minister Mangala Samaraweera pushed for the tripartite agreement on the port with the Maithripala Sirisena cabinet.

Colombo port was developed over decades with Japanese aid. But in the Mahinda Rajapakse years, Sri Lanka not only ceded Hambantota but also allowed China to build a new Colombo Port City.

The agreement on ECT puts India and Japan in Sri Lanka as a counter-presence to China. By keeping Colombo port among the top trans-shipment terminals in the world, India and Japan aim to reduce the effect of China’s BRI march in Hambantota. The Hambantota port, at the moment, sees its biggest action as a transhipment hub for cars exported from Chennai and bound for markets in Africa and Europe.

In 2017-18, India acquired operational control of Mattala International Airport close to Hambantota, which has been described as the emptiest airport in the world. This was seen as preferable to allowing it to fall into Chinese hands. The India-Japan push for Colombo port started in earnest in early 2018 after a visit by Japanese foreign minister Taro Kono to Sri Lanka, the first in 15 years. India and Japan then sealed a deal to develop an LNG terminal project within Colombo port, as well as build a floating storage regassification unit.

Within the Indian Ocean, India is quietly moving in to secure interests in key island states — Sri Lanka, Maldives, Mauritius , Seychelles and Madagascar. India’s projects, development aid and security assistance is aimed at denying space to China. This was an outcome of the realisation that China’s presence in the Indian Ocean region was expanding.

