China Merchants Holdings International Co would operate the new container terminal opened in Colombo recently. The terminal gives a new sea route for mega vessels from China.
The terminal which is regarded to be as sophisticated as the container terminal at the Singapore port is capable of handling 2.4 million containers a year.
The project gives Beijing an alternative access to the east-west route through Sri Lanka and thereby reduce its dependence on the congested and risky Malacca Straits near Malaysia.
Some analysts in the sector feel that it is a case of missed opportunity for India, which could have helped Sri Lanka build its port sector instead of allowing competitor China to muscle in and obtain access to the Indian Ocean.
China is building a $14 million dry port in Larcha in Nepal and trying to enhance its presence in Myanmar. It earlier funded and built the Gwadar port in Pakistan suggesting a larger program of connectivity in South Asia.
In order to avail funding, Sri Lanka has been looking toward China. With Sri Lanka's plans to create a hub concept, expansion of the Colombo port makes good economic sense.