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Sri Lanka seeks Indian stake in Colombo port amid Chinese presence

ECONOMYNEXT – Sri Lanka would like to see an investor from India take a share in a private consortium that will be given a concession to build and operate a container terminal in Colombo port, a minister said, amid a strong Chinese presence already in the port.

Sri Lanka’s John Keells Holdings, Hayleys and Aitken Spence have shown early interest in the building the terminal, along with global shipping lines like Maersk and NYK Lines, Ports Minister Arjuna Ranatunga said.

Minister Ranatunga said Sri Lanka would like to see an Indian investor take at least a 20 percent stake in a consortium that will run the East Terminal of the expanded deep draught South Harbour of Colombo Port.

The South Terminal of the port is already owned and operated by China Merchant Holdings (International).

"We would like to see an Indian investor take at least a 20 percent stake," Ranatunga told members of Sri Lanka’s Foreign Correspondents Association.

"More than 60 percent of Colombo’s transhipment cargo comes from India."

India’s Tata and Shapoorji Pallonji group are among names tipped as possible partners in consortia.

Shapoorji Polongi is also bidding to set up a liquefied natural gas terminal and power plant in Sri Lanka.

Analysts see the move as a way to allay Indian concerns over growing Chinese involvement in Sri Lanka’s ports, which depend on Indian traffic for growth.

China, which financed a brand new port in Hambantota is making the area a ‘Silk Road Station’ on its Belt and Road initiative.
Expressions of Interest to invest in the 1,200 meter terminal of which 400 meters had already been built by state-run Sri Lanka Ports Authority for 80 million dollars will close on August 31, and qualified consortia will be asked to submit requests for proposals within two months.





Ranatunga says another 400 million dollars would be needed to complete the terminal.

Sri Lanka is seeking a terminal operator and shipping line combination who can guarantee about a million containers a year in additional business to the port.

More than 20 parties have taken bid documents, Minister Ranatunga said.

These include China Merchant Holdings International, and China Harbour Engineering.

With a depth of East Terminal at 19 metres will be deeper than the Colombo International Container Terminal run by China Merchant Holdings.

Last year Colombo handled 5.1 million twenty foot equivalent units (TEUs). The newly built CICT can handle 2.4 million containers and the East Terminal will add another 2.4 million units, taking Colombo’s capacity up to 10 million units. (Colombo/Aug26/2016 – Corrected Shapoorji Pallonji)

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