Magampura Port gets $ 610m investment

Sri Lanka's ports authority on Wednesday said it has approved $610 million investment in large warehousing projects for sugar, fertiliser, and bottle manufacturing at its new port in Hambantota, due to start commercial operations this year.

The $1.4 billion port on the southern coast of the Indian Ocean island nation is among the single largest investment opportunities opened to outside investors since the end of a 25-year civil war in 2009.

The ports authority has secured around $1 billion in investment into secondary port facilities, including warehousing, as Hambantota gears up to attract 2,500 ships annually when it opens. The new port is located about 2 km from one of the world's biggest east-west shipping lanes.

"We have approved $610 million from three firms to start warehousing in a sugar refinery, fertiliser bagging and bottle manufacturing," Sri Lanka Ports Authority Chairman Priyath Wickrama told Reuters.

India's Shree Renuka Sugars , Singapore's Peak Energy and Sri Lanka's conglomerate Hayleys will together invest $610 million in sugar refining, bottle manufacturing, and fertiliser bag production respectively, Wickrama said.

"They will be starting operations before the end of next month. We also have unapproved proposals worth $30 million to start cement manufacturing, vehicle assembling, and building three more warehouses." The operators of large commercial ships have already discussed business opportunities with the ports authority, he said.

They will call on Hambantota after the removal of seabed rocks which are partially obstructing harbour entry for deep-draft ships, the cost of which is being paid for out of a $40 million Chinese loan, Wickrama said.

"We've already completed 99.6 percent of the rock removal and we need around $3 million for the remaining. The rest of the loan will be spent on remaining construction and for contractors," Wickrama said.

Sri Lanka is banking on the port to help fuel annual growth targets of 8-9 percent in its $50 billion economy. China on commercial terms loaned a combined $1.24 billion to build the port and a 4 million metric tonne fuel bunkering facility, all of it built by Chinese engineers - much to the chagrin of neighbouring India. COLOMBO, Reuters