• SLPA Chair confirms commencement of $ 392 m project after AG’s approval
• Delays stemmed from shifts in concession policies post-IMF intervention
• South Asia’s largest logistics hub to be developed via 50-year PPP agreement
• China Merchants Port Holdings leads with 70% stake in $ 392 m venture

The much-heralded project to build South Asia’s largest commercial and logistics complex at the Colombo Port is finally scheduled to commence this year with the granting of the Attorney General’s (AG) approval for the proposed concession agreement, which will be entered into with the Board of Investment (BOI), according to the Sri Lanka Ports Authority (SLPA). 

Speaking to The Sunday Morning Business, SLPA Chairman Admiral (Retd) Sirimevan Ranasinghe stated that the commencement of the logistics centre project had been delayed due to delays in reaching an agreement with the BOI on the concessions applicable to the project. 

However, he revealed that the AG had recently granted his approval to the proposed concession agreement to be entered into with the BOI. Therefore, the developer and the BOI can now go ahead and enter into a BOI agreement. Hence, he confirmed that the project would most likely commence this year.

Ranasinghe further stated that the delay in the commencement of this project had been due to the fact that the project was initially supposed to enjoy concessions as a Strategic Development Project (SDP). 

However, following Sri Lanka’s sovereign debt default and the involvement of the International Monetary Fund (IMF), the SDP facility was withdrawn and the developers were forced to seek the less favourable, general concessions offered by the BOI.

“The lease agreement for the land has been signed, but due to various reasons the construction of the buildings has yet to start. Because of the involvement of the IMF in 2022, the SDP facility was withdrawn in early 2023, so they had to go for BOI concessions,” he stated.

Ranasinghe revealed that the logistics centre project would take around 42-45 months to be completed. However, he claimed that successful completion of this project was a priority because the logistic centre was a mandatory requirement for the Colombo Port.

The three investing entities in this project are the China Merchants Port (CMPort) holding a 70% stake alongside the SLPA and Access Engineering, each holding a 15% stake in the venture. 

This 530,000 sq m logistics complex project is reported to involve an investment of around $ 392 million and will be carried out through a Public-Private Partnership (PPP) arrangement, approved on a Build-Operate-Transfer (BOT) basis for a leasehold period of 50 years.