ECONOMYNEXT – Sri Lanka’s West Container Terminal built with India’s Adani Ports is expecting its test vessel after commissioning cranes in February, its joint venture partner said, as India’s newly built Vizhinjam port marks 150 vessels.
“The construction and installation work on the West Container Terminal (WCT-1) at the Port of Colombo is progressing well with all civil works pertaining to the first phase of the project being completed,” Krishan Balendra, Chairman of John Keells Holdings, joint venture partner of the Colombo’s Adani venture told shareholders in groups’s quarterly accounts.
“All operating equipment relating to the first phase has been received and is being commissioned.
The terminal will be completed by February 2025 and expected to receive its inaugural test vessel, thereafter, signalling the commencement of its first phase of operations.”
Colombo’s monopoly as a transshipment port in South Asia was broken with India’s Vizhinjam Seaport, also operated by Adani group, which began test operations last year welcoming mega container carriers.
Indian Transshipment Port
Vizhinjam port bagged MSC, to make mainline calls days before getting its commissioning certificate.
“Our Jade service connecting Asia and Europe trade will now feature a call in Vizhinjam India before sailing to the Mediterranean,” MSC said in a statement in November.
“Our Dragon service will reshuffle Colombo with Vizhinjam on the eastbound leg.”
Feeder operators are jostling to expand calls to Vizhinjam port reports said.
By February 2025, Vizhignjam had received 150 vessel calls and handled 320,000 containers, with 85,000 in January alone, with ‘AI operations’ the Times of India reported.
The rest of Colombo’s Adani JKH terminal is on track for completion in the second half of the 2026/27 financial year.
“In addition to the competitive advantage of the overall strategic geographical location of Colombo, I am pleased to state that WCT-1 will be the first automated terminal at the Port of Colombo,” Balendra said.
Sri Lanka’s Colombo had a free run for decades amid state-run ports in the region, but is now facing competition amid privatization strategies of Indian governments.
Sri Lanka’s 2015 administration attempted to draw top shipping lines to get a stake in Colombo’s East Terminal along with an India partner through competitive bidding for which MSC, Maersk and CMA-CGM were among bidders, but amid conflicts with President Maithripala and union trouble, the plans were scuttled.
However, global shipping as well and India’s trade is expanding over the longer term, despite short term troubles expected due to monetary mis-management by macroeconomists in the Federal Reserve and also the Reserve Bank of India.
MSC said a call in Colombo will be added to its Britannia service connecting trade between Asia and North Europe as it announced the shift of a service from Sri Lanka.
Colombo was also added its America service eastbound from the US East Coast back to Asia, MSC said.
At the moment Colombo is getting higher volumes amid Red Sea disruptions, triggered by third parties after Israel started bombing the Gaza strip. A ceasefire with Israel has just gone into effect.
Past Indian Slowdowns Have Hit Colombo
The Indian rupee has been steadily collapsing since the RBI abandoned targeting a wholesale price index which kept the rupee around 35 to 40 to the US dollar since 1991, and shifted to targeting a broader consumer price index with greater inflation lags at around 4 percent in 2011.
When India hits a stabilization crisis to stop the rupee from collapsing following RBI mis-steps, Colombo’s port volumes fall with shrinking Indian external trade.
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Sri Lanka was also hit at the time as money was printed to target a mid-corridor rate in 2018 amid US tightening and a domestic recovery, despite having a managed currency in line with an operating framework that eventually helped plunge the country into external default.
The RBI is trying to juggle its policy rate which requires printing money to sterilize interventions, and the exchange rate has been the loser. (Colombo/Feb0/2025)
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