The Asian Development Bank (ADB) and Sri Lanka Ports Authority (SLPA) yesterday signed a transaction advisory services agreement to develop the East Container Terminal (ECT) of Colombo Port through Public-Private Partnership (PPP).
The signing was witnessed by ADB President Takehiko Nakao and Finance Minister Ravi Karunanayake.
“The terminal will maintain Colombo Port’s strategic position as a key trans-shipment hub for global and regional trade,” said ADB’s Country Director for Sri Lanka Sri Widowati. “The project will bring leading operations and technology from the private sector to improve the port’s value proposition to global shipping lines and increase its market share in the global trans-shipment market.”
The $500 million project will include operationalisation of the existing 400 metres of deep water berth and the full design, build, finance, operation, and maintenance of the remaining 800 metres of berth. The concession for the ECT is likely to be for 35 years.
SLPA has already invested $80 million in construction of the 400-meter berth at the terminal. ADB also provided a $300 million loan in 2008 to support the construction of the breakwater of the Colombo Port.
“ADB will advise SLPA in developing a bankable PPP structure and organising a competitive tender process to select the private sector partner,” said Head of ADB’s Office of Public-Private Partnership (OPPP) Ryuichi Kaga. “A transparent competitive tender process is expected to deliver the best value for SLPA for the construction and operations of the terminal and can help create a new template for structuring and delivering PPPs in Sri Lanka.”
ADB has long supported PPPs and on 1 September 2014 it established the OPPP to provide independent transaction advice on specific deals and develop broader PPP knowledge in the region.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members — 48 from the region.