Government wants port companies to invest in Colombo project

Government sources say they’re keen to promote participation of port companies, private or state-owned, in the Colombo Port Expansion Project (CPEP) at Sri Lanka.

It has been approached by the Lankan government. And, John Keells Holdings, one of the largest private sector companies in Sri Lanka, has sought help through our high commission there to identify a suitable strategic investor from India to partner them in bidding for the East Terminal at Colombo port, the largest and busiest in South Asia.

The high commission has written in this regard to the ministry of shipping here. Given the importance of Colombo port to India as a trans-shipment hub, the letter says, it would be beneficial if an Indian company is involved.

The Lankan government has been implementing CPEP by building three container terminals (south, east and west) sequentially, with 2.4 million TEU (Twenty-Foot Equivalent Unit, used for measuring a container ship’s capacity) each. The project also involves construction of a breakwater and other infrastructure. Development of the East Container Terminal, a $330-million project, is being undertaken by the Sri Lanka Ports Authority (SLPA). The first 400-metre section of the 1,200-metre East Container Terminal was commissioned in April this year.

The east terminal project is being financed by the Asian Development Bank (81.7 per cent) and SLPA (18.3 per cent). “It appears SLPA is interested in an operator that would also be able to attract traffic to this terminal, in addition to developing and operating it,” the high commission has written.

Of the three container terminals to be developed, the south one is already built, by a consortium called Colombo International Container Terminal Ltd (CICT), comprising China Merchant Holdings International (CMHI) with 85 per cent stake and SLPA with 15 per cent. The new terminal is being operated by CICT under a build-operate-transfer agreement of 35 years between SLPA and CMHI.

Union government-controlled Kandla Port Trust and Jawaharlal Nehru Port Trust are also looking at developing the strategically important Chabahar port in Iran, which will give India a sea-land access route to Afghanistan, bypassing Pakistan. India is likely to invest about $85 million to convert berths there into a container terminal and a multi-purpose cargo terminal.