SLPA goes for $ 500 m bond to restructure yen debt

Friday, 2 December 2011 00:00 -     - {{hitsCtrl.values.hits}}

Sri Lanka’s Central Bank will issue a US$ 500 million bond in January to restructure the debt of its Ports Authority, a top official said.

Sri Lanka Ports Authority (SLPA) Chairman Dr. Priyath Bandu Wickrema told media that the US$ 500 million bond was necessary as the organisation was losing money on repaying yen loans that had been taken in 1985.

“With the three per cent depreciation of the rupee and the appreciation of the yen, we have struggled to make payments. Due to the disparity of exchange rates the Ports Authority has lost over Rs. 40 billion (about US$ 360 million) in loan payments,” he said.

The bond will be issued by the Central Bank and it will also allocate the SLPA a special rating, he added.

The SLPA is one of the largest State institutions in the country with full authority over all the ports.

Since the end of the three-decade conflict in 2009, the Government has funnelled nearly US$ 1 billion into new ports as well as enlarging the Colombo Harbour.

China is funding a US$ 361 million port in the southern part of the country while the Asian Development Bank (ADB) has loaned US$ 300 million to expand the Colombo Harbour.

China Merchant Holdings signed a US$ 500 million deal with local conglomerate Aitken Spence and SLPA to construct the first deep water container terminal.

SLPA also outlined plans to develop 500 hectares of land around the Trincomalee Harbour next year. Other development projects include completion of the Hambantota Port, which will have its rock debris cleared within the next two weeks, Dr. Wickrema assured.

The Oluvil Harbour is another project that the SLPA hopes to make progress on during the coming year. (UJ)