USD 300 million ADB loan for Colombo Port expansion

Anjana Samarasinghe

LOAN: The Government of Sri Lanka entered into a USD 300 million loan agreement with the Asian Development Bank (ADB) for the Colombo Port expansion project yesterday.

Secretary to the Ministry of Finance and Planning Dr. P. B. Jayasundera said this is a public and private partnership project and the total investment will be over USD 780 million.

Apart from this USD 300 million the Government will provide USD 180 million for the project. The balance investment will be pumped through private sector. The project is scheduled to be completed by 2010, he said.

The demand for the Colombo Port in South Asia is increasing rapidly and it is necessary to develop the Colombo port as a regional hub port, he said.

Country Director of the ADB Richard W.A. Vokes said this is the largest loan the ADB has provided for Sri Lanka.

The grace period of the loan will be five years and the pay back period of the loan will be 25 years. The repayment will commence after five years.

ADB believes that this flagship project will reduce the handling cost and the shipping charges in the Colombo port, he said.

Chairman of the Sri Lanka Ports Authority Saliya Wickramasuriya said they have released the documents for tendering construction work of the project. Construction work of the project is expected to commence in September this year.

Developing the shipping industry in the country is a vital part of the economic development and SLPA is aware of their responsibilities in this endeavour, he said.

Under this project, public sector funds will be utilised for construction of the breakwater, the dredging of approach channels and harbour basin, relocation of the submarine oil pipeline and construction of ancillary facilities.

The private sector will finance the construction the first container terminal and procurement of associated handling equipment.

SLPA will implement the project under the supervision of the Ministry of Ports and Aviation.