Operations begin at Adani-backed port terminal in Colombo 

The development assumes significance, coming months after the multinational conglomerate withdrew another investment in Sri Lanka, a controversial wind power project of Adani Green.

Monday’s announcement marks the beginning of commercial operations at the port, but the inaugural call by a vessel is expected in May 2025, sources in Colombo indicated. The CWIT project — coming up next to the China-backed Colombo International Container Terminal (CICT) in Sri Lanka’s strategic port — is to be executed through a 35-year-long build-operate-transfer (BOT) contract among the three parties. While Adani Ports holds majority stakes of 51%, John Keells holds 34%, and the SLPA, 15%. 

Issuing a statement on Monday, Adani Ports said the terminal project represents “a significant investment” of $ 800 million and features a 1,400-metre quay length and 20-metre depth, enabling the terminal to handle approximately 3.2 million Twenty-foot Equivalent Units (TEUs) annually. “The facility is the first deep-water terminal in Colombo to be fully automated, designed to enhance cargo handling capabilities, improve vessel turnaround times and elevate the port’s status as a key transshipment hub in South Asia,” the company said.

Chairman Gautam Adani termed it “a milestone” in India-Sri Lanka regional cooperation and said the terminal placed Sri Lanka “firmly on the global maritime map”, according to the company’s statement. Krishan Balendra, Chairperson, John Keells Group said the project “strengthens Sri Lanka’s position as a regional maritime hub.” The Sri Lanka Ports Authority has not commented.  

Past controversies

The Adani Ports-led Colombo West International Terminal (CWIT) or the West Container Terminal project has been in focus for four years now. The agreement for the project was signed in September 2021, when President Gotabaya Rajapaksa was in office. It was months after he unilaterally cancelled the East Container Terminal project that the governments of Sri Lanka, India, and Japan had agreed to jointly develop. His decision caused considerable strain in bilateral ties. Subsequently, Mr. Gotabaya offered the West Container Terminal to India, in a move that Sri Lankan officials described a “compromise” deal with India, with ‘Adani Ports’ coming in as the Indian government’s “nominee”.

The project was back in the spotlight last year, after Federal prosecutors in New York indicted Adani Group Chairman and seven others on multiple counts of fraud. The U.S. International Development Finance Corporation (DFC), which had earlier pledged over half a billion dollars in the project, said it had not disbursed any funds as it was “continuing to assess the situation”.  Meanwhile, Adani Ports withdrew the $553 million loan request from the DFC, instead deciding to fund the Colombo West International Terminal (CWIT) from internal sources.

Despite past controversies surrounding the terminal project, the ruling Anura Kumara Dissanayake government has expressed keenness to take it forward, seeing opportunity to “boost revenue” at the Colombo Port. Sri Lanka’s Minister of Transport, Highways, Ports and Civil Aviation Bimal Rathnayake described the CWIT project a “foster child” from two past governments [Presidents Gotabaya and Ranil Wickremesinghe who succeeded him]. “It was an unsolicited investment that came in without any competitive bid. But we cannot delete it like a computer programme, especially after considerable amount of infrastructure work has been done,” he told The Hindu, adding that the National People’s Power [NPP] government would try its best to follow due process in all future investments. “Also, more than 95 % of those employed at the terminal are young Sri Lankans,” Rathnayake added.

The Adani Ports project is one of two projects firmed up by President Gotabaya and taken forward by President Wickremesinghe. In February this year, Adani Green exited from a $ 442-million renewable energy initiative in northern Sri Lanka, with President Dissanayake’s government contending that the company’s “high tariff” cannot be justified. Locals and activists, too, had mounted stiff resistance on grounds of environmental impact and transparency. However, the company has expressed interest in reopening negotiations, Foreign Minister Vijitha Herath told The Hindu in a recent interview.