China Development Bank to lend $ 350 m for CMHI-Spence port project

The China Development Bank Corporation has agreed to fund the Colombo South Container Terminal project with a loan facility up to US$ 350 million and the rest of the capital is to be raised by the shareholders equity.

The promoters of the venture are China Merchant Harbour International (CMHI), owning 55% stake, Aitken Spence (30%) and Sri Lanka Ports Authority (15%).

The Build Operate and Transfer (BOT) deal on the US$ 500 million project was signed in China last week as expansion of the Port of Colombo has been identified by the Government as the flagship development endeavour in the current decade, targeted at giving Colombo a competitive edge over other regional ports.

SLPA said yesterday that building of East and West terminals in the Colombo port will be undertaken in later stages.

           

“The remainder of the infrastructure building will be carried out simultaneously with the construction of the South Container Terminal,” it added.

The Phase 1 of Colombo South Harbour, envisaging three terminals of over 1,200 m in length each to accommodate four berths alongside depths of 18 metres with provision to deepen to 23 metres to accommodate deeper draft vessels in the future, is scheduled to be carried out in stages.

The first stage involves the development of basic infrastructure with public funds, i.e. the breakwater, which by now is over 66% completed and the second stage involves the construction of the CST on a BOT basis with Public-Private Partnership (PPP).

The first 600 m quay length of the CST is expected to be open for operations by December 2013 and the entire terminal consisting of four berths of 300 m each will be completed thereafter.

At the end of the 35 years of BOT concession period, the whole terminal infrastructure will be transferred to SLPA at no additional cost.

The CST when completed will provide a harbour basin of 18 m depth, to accommodate most modern container megaships and have a handling capacity of 2.4 million Twenty Foot Equivalent Units (TEUs) and when the Phase 1 of the project becomes fully-blossomed with three such terminals each having a capacity of 2.4 million TEUs will cater for additional 7.2 million TEUs over the existing capacity of the Port of Colombo, undoubtedly making Colombo the mega hub in South Asia.

“This venture augurs well towards the fulfillment of the pledge made by President Mahinda Rajapaksa that Sri Lanka is not far away from the day of becoming a major Logistical Hub offering advanced support services in the region,” SLPA said.