Sri Lanka Ports Authority aims at 51-pct stake in new terminal amid delays
Mar 10, 2017 10:07 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - State-run Sri Lanka Ports Authority would like to retain a 51 percent in a terminal for which a private investor is being sought, Ports Minister Arjuna Ranatunga said, as top global shipping lines up to invest in Colombo, amid delays.
Top lines inclu ding Mearsk, MSC, CMA CGM came with Sri Lankan and Indian partners offering to build and operated the second (East) terminal in an expanded Colombo Port last September, with the expectation that the landlord would have a minority stake.
But the process has been bogged down in delays, with what critics say are shifting goal posts.
The SLPA would like to retain 51 percent of the terminal, Ports Minister Arjuna Ranatunga said.
A 400 metre stretch of East Terminal has already been built by SLPA, and the private partner would have to complete the balance 800 metres, put in cranes and bring new business.
The SLPA has asked for cabinet approval to buy cranes and operate the first section of the terminal, which can accommodate the largest vessels on the seas.
SLPA Chairman Dhammika Ranatunga said it may take up to and year to get the cranes as it took several months for the cranes to be built after ordering.
With an operating section under their arm, SLPA could ask for a larger stake in the terminal with a private partner, officials believe.
SLPA has a 15 percent stake in China International Container Terminal (CICT) operated by CM Ports, which had already bought new business.
The SLPA had earned 5.7 billion rupees (about 38 million dollars) as royalties from the terminal in 2016.
Another privately run terminal, South Asia Gateway Terminals owned by John Keells Holdings had paid 4.4 billion rupees showing the success of a strategy of bringing private investors.
It is not clear whether private line would make Colombo its regional hub without a majority stake.
Ranatunga said no decision had been made to drop Mearsk and John Keells Holdings from bidders who are eligible to bid for the East Terminal.
There had been speculation that a powerful economic committee had decided to exclude existing operators, in the latest shifting of goal posts.
Sri Lanka's expanded Colombo port has more space to build a terminals. (Colombo/Mar10/2017)