Sri Lankan Cabinet gives nod to Colombo Port expansion

Colombo: The Cabinet has approved the memorandum submitted by Ports and Aviation Minister Mangala Samaraweera on the Colombo Port Expansion Project (Colombo South Harbour Construction).


The Cabinet has given approval to appoint a Procurement Committee and a technical Evaluation Committee to undertake Procurement Action for the ADB funded project.


The Government is to increase the container handling capacity of the existing Colombo Port by 2009.


The expansion of the Colombo Port would be essential and additional capacity has to be operational by 2009-2010, Cabinet Spokesman Minister Anura Priyadharshana Yapa told the weekly Cabinet Press briefing yesterday.


Approval has also been given to re-constituting the Cabinet Appointed Negotiating Committee and the project Committee to handle matters pertaining to the Container Terminal Concession.


The Cabinet has also approved to appoint an Advisory Committee to promote port competition and the appointment of consultant M/s Scott Wilson Kirkpatrick & Co. Ltd. who completed detailed designs to be appointed construction supervising consultant with the concurrence of the ADB.


The Minister said the Asian Development Bank has provided US$ 10 million for consultancy services to study measures to improve the efficiency of the existing Colombo Port and to formulate a Business Plan, detailed engineering designs and tender documents for the new South harbour.


According to the tentative time schedule, work will start in the latter half of 2007 to complete work during early 2010, he said.


The Minister said the overall Colombo Port Expansion Project has two inter-related components, namely breakwater construction to be undertaken with the ADB funding and a container terminal to be undertaken by the private investor.


Both sides further discussed in August 2006 and agreed to sign a MoU. According to the MoU, the Government has requested a loan of US$ 225 million for the implementation of the Colombo Port Expansion Project and the ADB has agreed to provide this loan. The ADB is expected to approve the loan in March 2007.


According to the Minister, the new harbour basin and container handling facility will be capable of handling future mega container ships which the existing port cannot be able to handle.


'The volume of container handling in the Port of Colombo has rapidly increased during the past two decades. These containers are handled at the Ports Authority owned Jaya Container Terminal (JCT) and private sector-owned South Asia Gateway terminal (SAGT). The total capacity of the two terminals is estimated to be 3.3 million (TEU)- Twenty foot Equivalent Units of containers. The volume handled has been 2,455,293 TEUs.'


The Asian Development Bank (ADB) has been indicating willingness to fund the breakwater construction but some of the preconditions attached to the loan were not acceptable in the current political climate.


During the meeting held in May 2006 to discuss issues related to the future loan for the project, the ADB agreed to relax the conditions to some extent in order to facilitate the approval of the loan, he said.