Sri Lanka’s Adani-owned West Container Terminal (WCT) of Colombo Port will cause a net present tax revenue loss of United States dollar ($) 207 million to the Government, over the project implementation period for the exemptions provided for the $ 650 million investment, Board of Investments(BOI) said.

Speaking before the Committee on Public Finance (COPF) on Wednesday (08), officials of the BOI revealed that the $ 650 million investment for the Build Operate Transfer (BOT) Agreement signed between Colombo West International Terminal (Private) Limited and the Sri Lanka Ports Authority (SLPA) has caused a present tax revenue loss of $ 207 million over the 5-year implementation period.

The BOI said that out of the total investment of $ 650 million, only $ 289 million is required for phase 1 of the project, which has already been brought in. 

It was revealed that phase 1 of WCT will be completed in March this year and thereafter the port will be commercialised, while the rest of the investment will pertain to phase 2 of the project.

Moreover, BOI officials have said that out of the present tax revenue loss of $ 207 million, the tax foregone, which covers customs duties and other levies exemptions, amounts to $ 104 million.

The BOI was unable to provide the COPF with the estimated benefit to the Treasury for the 25-year tax break, but added that the WCT once operationalised, is expected to have an annual revenue between $ 130-140, out of which the SLPA owns a 15% stake of the WCT, and would share the dividends.

In December last year, the Adani Group announced that it would finance the WCT through internal accruals and a capital management plan, withdrawing its request for funding from the US International Development Finance Corporation (DFC).

The DFC last year said it would provide $553 million in financing for the port terminal project, where 51% of the stake is owned by the Adani Group, while John Keells Holdings owns 34% of the terminal, and the rest is held by SLPA.