Monday Oct 19, 2026
Monday Oct 19, 2026
Monday, 19 October 2026 05:19 - - {{hitsCtrl.values.hits}}
China Merchants Port Holdings Company Ltd., the Sri Lanka Ports Authority (SLPA), and Access Engineering PLC have agreed to abandon the South Asia Commercial and Logistics Hub (SACLH) project in Port of Colombo. Under the settlement, the three partners will get back about $ 29.8 million of the $ 37.1 million they had invested.
The Hong Kong-listed port operator said last week that the parties had signed a settlement agreement. The agreement ends the Shareholders Agreement, the Build-Operate-Transfer (BOT) Agreement, and the Site Lease Agreement early, and settles all matters relating to the project with immediate effect.
The Daily FT reported in April 2023 that the investment in the project was $ 392 million, when agreements for the hub were signed in Colombo. The project was billed at the time as the largest commercial and logistics complex in South Asia. It was a public-private partnership to be built in the centre of Port of Colombo, with 530,000 cubic metres of storage capacity in an eight-floor building. It was to be developed as a 50-year BOT project. Under that model, a private investor builds and runs an asset for a fixed period before handing it back to the State.
The project company, SACL, is 70% owned by China Merchants Port’s wholly-owned subsidiary FCGL, while Access Engineering and the SLPA hold 15% each. According to SACL’s audited financial statements as at 31 December 2025, the shareholders had contributed $ 37.1 million in cash: $ 26 million from FCGL and $ 5.6 million each from Access Engineering and the SLPA.
Under the settlement, the SLPA has agreed that a $ 26 million investment made by SACL’s shareholders is payable to them, after deductions for tax and late payment liability. The SLPA has already paid a value added tax (VAT) liability of $ 3.9 million to the Inland Revenue Department and will move to settle a further $ 195,000 in late payment liability. The SLPA will pay the remaining $ 21.9 million to SACL as a one-time lump sum within 30 days of the date of the settlement agreement.
SACL will also distribute about $ 7.85 million in cash, which its audited accounts showed as distributable at the end of 2025.
Both sums will be shared in proportion to shareholdings. FCGL will receive about $ 20.8 million, and Access Engineering and the SLPA will receive about $ 4.5 million each. FCGL will therefore recover about $ 5.2 million less than its $ 26 million contribution, and Access Engineering about $ 1.1 million less than its $ 5.6 million.
China Merchants Port said it had reassessed the project in view of changes in external circumstances. These included adjustments to the project’s implementation environment and timetable, as well as the parties’ respective commercial considerations. It concluded that ending the project would be in the best interests of all parties. The settlement was proposed after discussions with the Government, on the principles of ‘amicable consultation and neutral handling.’
The company’s Board, including its Independent Non-Executive Directors, said the terms were normal commercial terms, fair and reasonable, and in the interests of shareholders as a whole.
The partners will now take steps to strike off or, if applicable, wind up SACL. They will share the related costs in the same 70:15:15 ratio.
Under Hong Kong’s Listing Rules, the SLPA counts as a connected person of China Merchants Port at the subsidiary level. This is because the SLPA also holds 15% of Colombo International Container Terminals (CICT), which manages Port of Colombo’s South Terminal and in which China Merchants Port holds the remaining 85%. The settlement is therefore a connected transaction. However, all of the transaction’s applicable percentage ratios are below 1%, so it is exempt from reporting, announcement, and independent shareholder approval requirements. Early termination of the original agreements does require disclosure.
