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Colombo to announce winning bidder for East Container Terminal next year

SRI LANKA is to announce the winner of the bidding contest to operate Colombo's East Container Terminal by the beginning of next year.

This is timed to occur before the construction of the first container berth at the terminal is completed.

The new terminal will add 2.4 million TEU of capacity. The winning consortium will operate and maintain an existing 440-metre berth as well as finance, design, build, operate and maintain an additional 760-metre berth under a 35-year build-operate-transfer arrangement. The Sri Lankan Ports Authority (SLPA) will retain a 51 per cent stake in the operating consortium.

The chosen operator will be able to start handling containers soon after the awarding of the concession, according to the Asian Development Bank (ADB), reported IHS Media.

The ADB, which is advising the SLPA on the transaction, said a request for proposal and draft concession agreement for the project will be released during the third quarter of this year, with the winning bidder selected before the end of the first quarter of 2017.

"With increased use of larger vessels in the South Asian transshipment market, development of additional deep-water berths is urgently needed to retain Colombo Port's competitive position," said ADB's Office of Public-Private Partnership's Chaorin Shim.

The East Container Terminal will support the port of Colombo's target of doubling container throughput to 10 million TEU by 2025. Government figures show Colombo handled 5.18 million TEU in 2015, representing growth of 5.7 per cent over 2014.

Colombo International Container Terminals is a joint venture between Hong Kong's China Merchants Holdings (International) and the SLPA. China Merchants has an 85 per cent stake in the 2.4 million-TEU terminal in which it invested US$500 million.

In a separate development, SLPA and Sri Lanka's Ministry of Ports and Shipping issued a request for proposal for private investors to assist in the development of an industrial zone at the port of Hambantota located in the southeast of the nation. The RFP seeks bids from investors to develop port-related businesses, industry, and tourism and leisure activities.

The zone is part of the 1,815-hectare Hambantota Port Development Project. The first phase of the project, consisting of harbour works including two breakwaters and dredging of the entrance channel, as well as service, general purpose and oil berths and access roads, is complete.

The works currently support a growing roll-on, roll-off import and transshipment business and bunkering services at the port.

Much of phase two, which consists of main and feeder container berths, a second oil berth and further deepening of the entrance channel to 17 metres, is nearing completion.

Proposals have been tabled to extend a new expressway connecting Colombo with the southern part of the country to Hambantota and to create an additional link between the port and the Mattala International Airport.

The government also has ambitious plans to develop Sri Lanka's two other international ports, at Galle and Trincomalee.