Colombo Port expansion project delayed

The Port of Colombo has moved a total of 817,578 TEUs during the first quarter of 2007 against 647,977 TEUs for the same period in 2006, marking a year-on-year growth of 26.2 percent, as per SLPA.

The construction of the newest terminal in the Colombo Port is getting further delayed, despite the government’s plans to finalise selecting the successful party to award the concessions agreement to one of the five bidders that were short listed by mid August, according to Sri Lanka Ports Authority (SLPA) sources.

“We are still carrying out the finalising procedure,” a senior port official said.

The deadline for submission of Expression of Interests (EOI) ended on June 12 with five parties communicating their firm interests together with Requests for Proposals (RFP).

The bidders are John Keells Holdings-South Asia Gateway Terminals in partnership with Malaysian Pembinan Ridzai Berhard, Hayleys-Carsons consortium partnering CMA CGM port arm, Aitken Spence with Port of Singapore, Hutchison and Hanjin Shipping and this was to be finalised within 60 days from June.

The project involves building a terminal with three berths that could handle around 2.4 million Twenty-foot Equivalent Units (TEUs) estimated to cost around or over US$ 500 million.

The mega 12-berth South harbour project of the Colombo port has two other terminals - the Eastern terminal and the Western terminal, proposed in addition to the Southern one.

The proposed Colombo South Harbour will be located west of the present south west Breakwater in an area of approximately 600 hectares and will have 4 terminals of over 1,200m in length each to accommodate 3 berths alongside depths of 18m and provision to deepen to 23m to accommodate deeper draft vessels of the future.

“Colombo Port is nearing its current container handling capacity and if there is no capacity enhancement, major shipping lines will move to other ports. The longer it is delayed the worse our country’s competitive position is,” an industry analyst said.

He stressed that Colombo Port cannot offer the additional operating capacity required to compete for the Indian subcontinent transhipment market or the depth required to berth the latest generation container ships. It will have to develop additional container berths with the required depth to address these capacity and depth infrastructure constraints if it is to remain a transshipment hub port, he said.

An SLPA source said that Colombo is facing growing competition from Dubai and Singapore while its hub status as well as scope for future traffic is under threat due to massive port development activities in several Indian ports.

The Port of Colombo has moved a total of 817,578 TEUs during the first quarter of 2007 against 647,977 TEUs for the same period in 2006, marking a year-on-year growth of 26.2 percent, as per SLPA statistics. Dominated by the Sri Lanka Ports Authority managed Jaya Container Terminals and ably supported by JKH’s SAGT, the Colombo port, which handled three million TEUs in 2006 is the biggest and most equipped and modern in South Asia and has been enjoying relatively high growth in business volume.