The Sri Lanka Ports Authority (SLPA) has decided to pursue the development of a new logistics hub within the Port of Colombo through a Public–Private Partnership (PPP) following the decision of the shareholders not to proceed with the previously proposed joint venture involving China Merchants Port Holdings Company Limited, through its fully owned Subsidiary and Access Engineering PLC.
The earlier project was intended to establish a modern logistics facility within the Port of Colombo through a joint venture company known as South Asia Commercial and Logistics Hub (SACLH), the Ports Authority said in a statement.
The company was established in 2023 with the participation of three shareholders: China Merchants Port Holdings Company Limited, through its fully owned Subsidiary holding a 70% equity stake, and the Sri Lanka Ports Authority and Access Engineering PLC, each holding a 15% equity stake.
The proposed project envisaged a total investment of approximately USD 280 million, with a planned floor capacity of approximately 150,000 square meters.
The initiative was originally conceived to enhance the logistics capabilities of the Port of Colombo and strengthen its position as a major regional maritime and logistics centre, the statement stated.
However, following an assessment of the prevailing external circumstances, commercial considerations and the interests of the respective shareholders, a decision was reached not to proceed with the proposed joint venture.
Under the agreed arrangements, the three shareholders will receive refunds of their respective equity contributions, subject to applicable regulatory requirements and operational expenses, it said.
According to the Ports Authority, the total amount to be refunded is approximately USD 29.8 million, which will be distributed among the shareholders in proportion to their respective equity contributions by SACLH notwithstanding the decision to discontinue the earlier joint venture. The Sri Lanka Ports Authority said it remains committed to developing modern logistics infrastructure within the Port of Colombo to meet the evolving requirements of international maritime trade and supply chains.
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, the statement stated.
The proposed development will utilize a substantial land area within the Port of Colombo to establish a modern, integrated logistics facility capable of supporting a wide range of port-related and value-added logistics activities.
The initiative is expected to facilitate the transformation of the Port of Colombo from a predominantly container transshipment hub into a comprehensive maritime and logistics hub, providing enhanced services to shipping lines, cargo owners, logistics operators and other stakeholders in the international supply chain.
The proposed PPP approach is also expected to create opportunities for private-sector participation, attract investment, optimise the utilization of valuable port land and infrastructure, and generate sustainable long-term revenue for the Sri Lanka Ports Authority.
The development of an integrated logistics hub is considered an important component of the SLPA’s broader strategy to strengthen the competitiveness of the Port of Colombo, improve operational efficiency and expand its role in regional and international trade, it stated.
The Sri Lanka Ports Authority emphasized that the decision not to proceed with the earlier joint venture does not represent a departure from its commitment to logistics infrastructure development. According to the Ports Authority, it provides an opportunity to pursue an alternative development model that better aligns with the Authority’s strategic priorities, commercial objectives and the long-term interests of the Port of Colombo.
The SLPA said it remains firmly committed to positioning the Port of Colombo as a leading maritime, transshipment and logistics hub in South Asia, while ensuring that future port development initiatives are commercially viable, financially sustainable and aligned with Sri Lanka’s national economic interests, according to the statement.
