Chinese box game for Sri Lanka

Port Strategy
.............................................................................................................................................................................................

The Chinese presence in Sri Lanka has grown further with a US$500m deal to create the largest box facility yet. But it might not wear the crown for long.

China Merchants Holdings International (CMHI), one of China's biggest state-owned conglomerates, is to construct the 2.4m teu Colombo South Container Terminal (CST) in two phases using the China Harbour Engineering Company and the Sinohydro Corporation, the same contractors used for Sri Lanka’s other major box port at Hambantota. Operations are due to start in early 2013, and the whole project is due for completion by the end of 2016.

CST will be constructed with 18 metres of deepwater, and is to possess a total quay length of 1.2km with a landside storage facility of 58 hectares. CMHI has a 55% stake in the project while Sri Lankan conglomerate Aitken Spence’s share is 30%: the Sri Lankan port authority is to hold the remaining 15% stake.

CMHI said that the new facility is looking toward business in both South Asia and East Africa, “which will anchor the port of Colombo's position as a transhipment hub".

However, the Hambantota facility is also expanding: the Sri Lankan Ports authority has inked a US$810-million contract with China Communications Construction Company to build its second phase, which will mean it again outstrips Columbo.

Despite this, there still may be plenty of room in the economy: according to port authorities the volume in Sri Lanka surged by 22% in 2010 to 4.16 million teu.

© Port Strategy