ADB, Sri Lanka Ports Authority ink agreement for $500m port project

Philippine-based Asian Development Bank (ADB) and the Sri Lanka Ports Authority (SLPA) signed on Tuesday a transaction advisory services agreement for the development of a $500 million port project.The goal is to develop the East Container Terminal (ECT) of Colombo Port through public–private partnership (PPP).

ADB president Takehiko Nakao, and Sri Lanka’s finance minister Ravi Karunanayake witnessed the signing in Colombo, Sri Lanka on Tuesday. Sri Widowati, ADB country director for Sri Lanka, said the terminal will maintain Colombo Port’s strategic position as a key trans-shipment hub for global and regional trade.

“The project will bring leading operations and technology from the private sector to improve the port’s value proposition to global shipping lines and increase its market share in the global trans-shipment market,” Widowati said.

The port project will include operationalization of the existing 400 meters of deep water berth and the full design, build, finance, operation, and maintenance of the remaining 800 meters of berth. The concession for the ECT is likely to be for 35 years.

In construction of the 400-meter berth at the terminal, SLPA has already invested $80 million, while ADB has provided a $300 million loan in 2008 to support the construction of the breakwater of the Colombo Port.

Ryuichi Kaga, head of ADB’s Office of Public-Private Partnership (OPPP), said they will advise SLPA in developing a bankable PPP structure and organizing a competitive tender process to select the private sector partner.

“A transparent competitive tender process is expected to deliver the best value for SLPA for the construction and operations of the terminal and can help create a new template for structuring and delivering PPPs in Sri Lanka,” Kaga said. A long supporter of PPPs, ADB established the OPPP in September 1, 2014 to provide independent transaction advice on specific deals and develop broader PPP knowledge in the region. (Deal Street Asia)