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China-led container terminal company makes US$ 30mn cut in investment pledged
View(s):By Namini Wijedasa
This came after the Sri Lanka Ports Authority (SLPA) said it could not offer space to extend the pier or for container yard improvement.
The Cabinet first approved a proposal to expand CICT’s capacity at the Colombo Port with an investment of US$ 90 million in October 2020. The decision, published on the official Cabinet website, was that CICT would introduce new equipment while upgrading and modernising existing equipment. But it also said no new construction would take place.
The project was expected to enhance the terminal’s productivity. The government, under then-President Gotabaya Rajapaksa, granted generous tax relief for this through the Strategic Development Projects Act.
President Ranil Wickremesinghe, in his capacity as Finance Minister, has approved a minor extension of the two-year customs duty exemption granted to the CICT expansion project from November 16 to December 31 this year.
The same gazette, dated May this year, adds a new clause to the 2020 gazette stating that: “The project company shall invest a minimum of the United States Dollars Sixty Million (US$ 60,000,000) or an equivalent amount in any other convertible currency in the proposed Capacity Expansion Project within the project implementation period ending December 31, 2024.”
The duty exemption is applicable (as before) to all equipment, accessories and components required for the capacity expansion project other than items mentioned in the negative list during the project implementation period now ending on December 31, this year.
“They revisited the whole thing,” SLPA Chairman Keith Bernard said. “The SLPA said we cannot allow more construction as there is just no space for it. They then came down to US$ 60 million and confined the expansion to equipment, such as cranes.”
The CICT’s neighbour is the West Container Terminal, which is under development jointly by Adani Ports, John Keells Holdings and SLPA (which has 15 percent equity).
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