$ 1 b Colombo Port Expansion Project: South Asia’s modern terminal opens

Tuesday, 6 August 2013 00:03 -     - {{hitsCtrl.values.hits}}

By Cheranka Mendis Sri Lanka yesterday opened the US$ 500 million Colombo International Container Terminal (CICT) as part of the Colombo Port Expansion Project (CPEP) in a bid to reinforce the country’s position as South Asia’s maritime hub. As the country braces itself to upgrade its infrastructure and become the centre for maritime excellence by 2020, the principal commercial port of Sri Lanka will be designed to open access to a new generation of mega vessels, cementing Sri Lanka’s position as an important international trade gateway.     The facility was inaugurated by President Mahinda Rajapaksa with the opening of a 46-metre main control tower equipped with state-of-the-art technology. Implemented under the Colombo International Container Terminals (CICT), a joint venture between China Merchants Holdings International and the Sri Lanka Ports Authority (SLPA), the new terminal is the only port in the South Asian region with a deepwater terminal that can accommodate the latest breed of 18,000 20-foot (container) TEU container ships, which currently holds record as the world’s largest. The world’s third leading container shipping company CMA CGM’s vessel ‘CMA CGM Pegasus,’ which trades between Europe and Asia, made the maiden call yesterday. An 11,000 TEU vessel, Pegasus was docked at the South Container Terminal during the ceremonial inauguration. The terminal is expected to handle 2.4 million containers a year and is part of the country’s plan to add 7.2 million TEUs additional volume per annum at minimum capacity at the completion of all three terminals. With the addition of the new terminal to the country’s infrastructure portfolio, the Sri Lankan map also underwent a shift in its geography as 500 acres of new land were added to Colombo on which the premises are built. A total of US$ 400 million investment has been made for the infrastructure work of the breakwater with US$ 300 million coming from the ADB and US$ 100 million from the Government. Introducing it as the ‘world’s largest breakwater’ SLPA Chairman Dr. Priyath Bandu Wickrama noted that the breakwater is 6.8 km long with a 260 hectare turning basin. “Everyone has their eyes on Sri Lanka,” Wickrama said. “The world’s naval map is changing. All big shipping companies are expressing interest to be part of our success story. This is the turning point in Sri Lanka’s economy. We are at the entryway to take the country to a whole new level.” He noted that so far the private sector has put in US$ 550 million for the project. Noting that the terminal will enhance the country’s competiveness in international trade and draw investors to set up manufacturing and distributing centres, Wickrama asserted that the need to expand the Port of Colombo came as Indian Ocean countries experienced a rapid and steady growth in cargo containerisation during the past few years. This has driven container vessels to consider economies of scale, demanding deep water channels, deep draft berths and larger turning channels. “Under the Colombo Port Expansion project, three terminals are to be constructed – each with a length of 1,200 metres accommodating three berths at a depth of 18 metres, which is likely to be deepened to 23 metres to accommodate deeper draft vessels in the foreseeable future,” he explained. The depth of the old port was 14.2 metres. The entry and exit of fleet at the old port was 20-25 vessels on a daily basis. Though the numbers might not increase in terms of fleet in the new port, the sizes of the vessels coming in is expected to be much larger than those that berthed here before. “With this terminal and infrastructure being inaugurated today, we have reached the first milestone of this massive project.” Reflecting on the Government’s recent declaration of attracting FDI by making the Ports of Colombo, Hambantota and Trincomalee free ports, he urged the CEOs of key shipping lines to reap the maximum benefit of the duty free zones and other facilities which will come in as a result of the free port concept. “I appeal to CEOs of all shipping lines who have come from far and near, members of the diplomatic corps and other dignitaries participating in this event to join hands to market our ports in the world and ensure that Sri Lanka is centre for the logistics excellence in the Silk Route.” Congratulating Sri Lanka on the grand opening of the terminal, ADB Vice President Xiaoya Zhao noted that the move would allow the country to regain its role as a leading South Asian transhipment hub. As the financial partner supporting the infrastructure development project in Sri Lanka, the South Container Terminal will mark the beginning of a new era in the Asian Silk Route, he said. “I am confident that the completion of the port will further enhance the role of Sri Lanka in international trade in transhipment in this Indian Ocean subcontinent,” Zhao asserted. Sri Lanka is an important member country of the ADB and the bank is proud to partner the country to engage in major infrastructure projects such as roads, ports, energy and urban and rural development. He revealed that ADB has recently approved a project to develop Colombo water supply system and then move on to increase rural road connectivity with the Government. While the Colombo Port is significant in many levels, one area that holds particular importance is the public-private partnership under which it is developed. Having provided US$ 300 million to start this project almost five years ago, ADB’s role is to improve the facility of this port infrastructure so that private sector can come in and join in developing the ports facility. “Now we see the private sector coming in such as the China Merchants Holdings International, Development Bank of China, China export, trade and insurance institutions, China EXIM Bank, Korean EXIM Bank, and Hyundai Engineering and Construction Company as the contractor,” he said. Zhao added: “On behalf of the ADB I would like to thank financial partners, co-financiers of other countries and donor countries as well as their contribution to the ADB, which has made it possible for us to provide concessional loans of interest free 35-40 years of maturity so that the country can engage in major infrastructure projects. We are glad that under the strong leadership of the President, the country can really demonstrate how it can implement good projects in the country for prosperity and economic growth of the country in the future.” Hyundai Engineering and Construction Company Ltd. CEO Su Hyeon Jung offering his wishes to the country as well as the SLPA also extended his gratitude for having been picked as the contractor for the landmark project. “The successful execution of the Colombo Port Expansion Project celebrates the development of Sri Lanka,” Jung said. “It is our great pleasure that Hyundai has been given a chance to contribute to this meaningful project. Although we have faced some difficult situations during the execution, we were able to overcome all the obstacles in our path for a successful completion.” Pix by Sudath Silva and Lasantha Kumara