Sri Lanka Port Authority agrees 35 year lease for new container terminal

Port of Colombo

The Sri Lanka Ports Authority (SLPA) and Colombo West International Container Terminal Limited have signed a Build, Own and Transfer Agreement to agree a lease period of 35 years.

The new West Container Terminal-1 (WCT-1) will be operated by Adani Ports and Special Economic Zone Limited (APSEZ), with John Keells Holdings PLC joining the venture as a major foreign investor. Both parties signed the agreement with the SLPA on 30 September.

The partnership venture will be built in the Port of Colombo and is set to directly counter China’s growing influence in the Pacific and Sri Lanka specifically. It will directly compete with the Colombo International Container Terminal and the southern Port of Hambantota which are both operated by China Merchants Port Holdings.

APSEZ is said to own a controlling 51% of the terminal, with John Keells Holdings PLC owning 34% stake (said to be worth $70 million), the remaining amount will be held by the SLPA. The partnership will operate the terminal for 35 years before transferring over fully to the port’s authority.

The project will cost approximately $650 million, topping the estimated $500 million invested by China in building its facilities in Colombo.

According to a letter John Keell Holdings sent to the Colombo Stock Exchange, the WCT-1 is a deep-water terminal with a quay length of 1,400 meters, a depth of 20 meters and an annual handling capability of approximately 3.2 million TEU.

The debt funding for the project has been secured, subject to the closure of the related financial documents and construction is to begin in 2022.

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