Saturday, February 24, 2024

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SL’s new US-funded, Indian-built port to counter Chinese influence

By: Staff Writer

Colombo (LNW): The container port terminal being built in Colombo by India’s Adani Group is mostly being paid for with funds from a US government agency.

Analysts say it unveils a new type of public-private partnership being rolled out as part of the Quad grouping’s infrastructure push.

A US-funded port project in Sri Lanka that is partly owned by a private group close to India’s ruling party could signal a new form of partnership to counter growing Chinese influence in the Indo-Pacific region.

The Adani Group, controlled by Indian billionaire Gautam Adani and with businesses ranging from ports to edible oils, is developing the Colombo West International Terminal project in Sri Lanka’s capital and holds a 51 per cent stake in the project, backed by more than US$500 million in funding from a US government agency.

Sri Lankan conglomerate John Keells Holdings and the state-run Sri Lanka Ports Authority hold the remaining stakes.

India and the United States – alongside Australia and Japan – form the Quad diplomatic network, whose leaders have said they are focused on providing an alternative to Chinese infrastructure projects for developing nations.

The new Sri Lankan port terminal, resembling a public-private partnership, would appear to be their first such endeavour.

Analysts say the move signals a new determination on the Quad’s part to guard against smaller nations leaning too heavily on China and its arterial trade and military routes. Another terminal at the port is run by China Merchants Port Holdings Co Ltd.

Cedomir Nestrovic, a professor of geopolitics at the ESSEC Business School Asia-Pacific in Singapore, said it would be too simplistic to characterise the US-funded project as just another business deal.

He said geopolitical interests could be seen in the fact that the US$553 million in financing from the US International Development Finance Corporation, a federal government agency, represents nearly four-fifths of the US$700 million required to build the terminal.

There are not many other cases “where America has invested institutionally in this way, with this amount of money,” Nestrovic said. “The political motivation is part of the larger rivalry that exists between the United States and China.”

US efforts to contain China militarily through the presence of American troops in South Korea and Japan have been expanded into the economic sphere via the larger Quad grouping and the push “to ‘cut the grass’ of Chinese investments”, Nestrovic said.

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