Colombo Port expansion project:

Lanka to be leading maritime centre in SA

Developing the port sector has been assigned high priority by the government in making Sri Lanka as the leading maritime centre in South Asian region. The main harbour infrastructure work such as breakwater construction and harbour channel dredging are the most important and non profitable features of the port. In facilitating the country towards economic and social development, Sri Lanka Ports Authority (SLPA) has taken over the challenge of constructing the main harbour infrastructure work on behalf of the government, states a release from Ports and Highways Deputy Ministry yesterday.

It said, the entire port project is called ‘Colombo Port Expansion Project (CPEP)’ and this project provides breakwater construction and harbour channel dredging to accommodate three, 1,200 metre long terminals which will be constructed sequentially. Each terminal consist of 400 metre long three berths and can accommodate 2.4 million TEUs per year. The project includes the establishment of a new marine operations centre, relocation of a submarine oil pipeline, provision of navigational aids and construction of shore utilities.

The harbour infrastructure works of this CPEP was initiated with a total estimated construction cost of US Dollars 330 million. The Asian Development Bank and Sri Lanka Ports Authority jointly finance the project of infrastructure works as ADB finance US $ 300 million which is 81.7 percent of the total cost and remaining 18.3 percent will be financed by SLPA.

The CPEP construction work was officially commenced on April 11, 2008 and scheduled to be completed within 48 months. The CPEP project’s main contractor is M/s Hyundai Engineering Construction and Co. Ltd for a contract price of Sri Lanka Rs 36,355,198,496. The consultant of this project is M/s Scott Wilson Ltd.

The progress of the work is satisfactory and the contractor could be able to complete the project as scheduled in April 2012. The physical progress of the project is 65 percent in May 2011.

The terminals construction and other related services is considered separately. As initiation the Letter Of Intent (LOI) has been issued to the selected developer of the South Container Terminal of the port of Colombo, M/s China Merchants Holdings (International) Co Ltd and Aitken Spence Plc Consortium.

The consortium has fulfilled the pre-conditions given in LOI. The BOT agreement will be signed between SLPA and Consortium after obtaining the clearance of the Attorney General’s Department in near future.

This project will lead Sri Lanka to be the Pearl of Asian Silk Route once again. The mega vessels which cannot access the Colombo port will be able to enter the new port and the container handling capacity will be doubled.

The new port will reduce the time taken for import and export procedures, while increasing competition between marine companies will lead to reduced shipping charges.

The new port will also enable farmers to export their products to markets worldwide. In this manner, the economic benefits will not only be accruing to the country, but also directly to our farmers and entrepreneurs. Further, the direct employment from these three terminals would be 4,000 and indirect employment may increase significantly with the new port operations.