Sri Lanka Aitken Spence-China Merchant consortium gets terminal deal

17 Sep
Sept 16, 2010 (LBO) – Sri Lanka has awarded a contract to build and operate a new deep-water container terminal in Colombo port to a consortium consisting of China Merchant Holdings International and Aitken Spence, a statement said.
The South Container Terminal, the first terminal of the Colombo Port Expansion Project, will be built in two phases, Aitken Spence said in a stock exchange filing.It said the ministry of ports and aviation and Sri Lanka Ports Authority granted the consortium the letter of intent to design, build, operate and transfer the terminal following Cabinet approval.

The new terminal will have a quay wall length of 1.2 kilometres with a minimum alongside water depth of minus 18 metres, Aitken Spence said.

Construction work on the breakwater and dredging of the new port, funded mainly by an Asian Development Bank loan, is underway.

The new deep-water port is needed to retain Colombo port’s status as south Asia’s transhipment hub.

Existing terminals are not deep enough to handle the deep-draft bigger vessels now being deployed on trade routes across the India Ocean.

Sri Lanka Ports Authority Priyath Wickrama said recently construction of the new 450 million US dollar container terminal is expected to start within six months of the award being made.

The Aitken Spence – China Merchants consortium was the sole bidder for the terminal concession but SLPA negotiated for months for higher royalties and upfront fees.

Wickrama has said the terminal would be built by the same Chinese contractor that is building a Chinese financed port in the island’s south in Hambantota.

The Hambantota port is built by China Harbour Engineering Company (CHEC) and Sino Hydro Corporation.

The new Colombo terminal will be financed with debt and equity and will be jointly owned by listed Aitken Spence and China Merchants Holdings, along with the SLPA.

China Merchants Holdings will have 55 percent, Aitken Spence 30 percent and the SLPA 15 percent in the new terminal.

As seen on Lanka Business Online. For more information click http://www.lbo.lk/fullstory.php?nid=6667459

Media Release – 17 September 2010

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