COLOMBO At the Harbour Room, a shabby restaurant in a British colonial-era hotel in the Sri Lankan capital, diners tuck into a standard Asian buffet and listen to the soporific tones of a pianist. The main draw is the seating near the bay windows, which offer panoramic views of the port of Colombo. These days, the restaurant provides a vantage point for watching the government's tricky geopolitical balancing act play out in South Asia's busiest harbor.
At the heart of the government's dilemma is the expansion of the 1,200-meter-long East Container Terminal, half of which is completed. The coalition government, which came to power after a surprise victory in the January 2015 presidential election, has already closed the tender for this $500 million investment after receiving 20 bids. But the government is torn between India and China, which are both eyeing the South Asian island's strategic location on the Indian Ocean.