Colombo, Oct 19 (PTI) Sri Lanka’s Ports Authority on Monday decided to develop a new logistics hub at the Port of Colombo under a public-private partnership (PPP) model after a Chinese company withdrew from a proposed project, according to an official statement.
The Hong Kong-based China Merchants Port Holdings (CMPH), a state-owned port and logistics operator, said in a statement last week that it had withdrawn from the proposed USD 392 million logistics hub project.
The Sri Lanka Ports Authority (SLPA) agreed to a settlement of USD 21.9 million following the cancellation of the project, the CMPH said.
The project, formally launched in 2023, was envisaged as a large-scale logistics complex offering warehousing facilities and was to be developed under a 50-year build-operate-transfer arrangement.
Sri Lanka granted it Strategic Development Project status in December 2023, making the project eligible for tax concessions, including exemptions from corporate income tax and dividend taxes for 15 years.
However, delays and implementation difficulties prevented the project from progressing as planned.
“Notwithstanding the decision to discontinue the earlier joint venture, the Sri Lanka Ports Authority remains committed to developing modern logistics infrastructure within the Port of Colombo to meet the evolving requirements of international maritime trade and supply chains,” the SLPA said on Monday.
Accordingly, the SLPA has decided to pursue an alternative development strategy through the establishment of a new logistics hub under a Public-Private Partnership (PPP) model, through a competitive bidding process, with relevant approvals,” it said.
PPP is a long-term contractual arrangement between a government agency and a private sector company to build, finance, and operate public infrastructure or services.
The proposed facility is part of the SLPA’s efforts to expand logistics services at the port and strengthen Colombo’s position as a maritime and logistics centre in South Asia.
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