Sunday, June 4, 2023

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Sri Lanka and China Sign USD 400 Million Agreement to Build South Asia’s Largest Commercial and Logistics Hub

Yesterday, an agreement worth USD 400 million was signed between China Merchants Port Holdings Co. Ltd. (70%), Sri Lanka Ports Authority (15%), and Access Engineering PLC (15%) to build South Asia’s largest commercial and logistics hub at the center of Colombo Harbour. The eight-floor complex, 92 meters in height, will be constructed under a Public-Private Partnership with a concession period of 50 years.

The project is aimed at making Sri Lanka a major logistics hub in the region and aligns with the country’s national development strategy. It is identified as a key sector and driving force for economic development in the National Policy Framework (NPF) 2019. The construction of the project will commence in two months and is expected to be completed in two years.

“The investment in the project will bring in much-needed foreign investment into Sri Lanka,” said Ports, Shipping, and Aviation Minister Nimal Siripala De Silva. “Sri Lanka’s aspiration to become a major logistics hub in the region too would receive another boost with the launch of this project.”

Sri Lanka Ports Authority Chairman Keith Bernard said that the project will provide direct employment to a minimum of 1,800 people and create 10,500 other indirect job opportunities. Additionally, the complex will be directly linked with the airport via the Port Access Elevated Highway. The five million square foot complex will offer the full range of logistics-related facilities and services such as Less than Container Load (LCL), Multi-Country Consolidation (MCC), Container Freight Station (CFS), General warehousing, and various other value-added services.

The project aims to improve the operational efficiency of the Port of Colombo and introduce leading-edge technology and innovation. It will also provide better logistics and warehousing facilities and services, enhancing the port’s competitive advantage and consequently strengthening its hub status. The Port of Colombo is currently ranked among the top 13 ports in the world in terms of shipping.

The investment is a clear indication of the investor appetite for Sri Lanka despite the ongoing economic crisis. The project will bring in much-needed foreign investment into Sri Lanka and bolster its position as a major logistics center in the region.

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