SLPA to develop new logistics hub at Port of Colombo after earlier JV scrapped

The Sri Lanka Ports Authority (SLPA) yesterday said it has decided to pursue the development of a new logistics hub within Port of Colombo through a public-private partnership (PPP) following the decision of the shareholders not to proceed with the previously proposed joint venture (JV) involving China Merchants Port Holdings Company Ltd., through its fully owned subsidiary and Access Engineering PLC.

The earlier project was intended to establish a modern logistics facility within Port of Colombo through a JV company known as South Asia Commercial and Logistics Hub (SACLH).

 The company was established in 2023 with the participation of three shareholders: China Merchants Port Holdings Company Ltd., through its fully owned subsidiary holding a 70% equity stake, and the SPLA and Access Engineering PLC, each holding a 15% equity stake.

The proposed project envisaged a total investment of approximately $ 280 million, with a planned floor capacity of approximately 150,000 square metres. The initiative was originally conceived to enhance the logistics capabilities of Port of Colombo and strengthen its position as a major regional maritime and logistics centre.

However, following an assessment of the prevailing external circumstances, commercial considerations, and the interests of the respective shareholders, a decision was reached not to proceed with the proposed JV.

Under the agreed arrangements, the three shareholders will receive refunds of their respective equity contributions, subject to applicable regulatory requirements and operational expenses. The total amount to be refunded is approximately $ 29.8 million, which will be distributed among the shareholders in proportion to their respective equity contributions by SACLH.

Notwithstanding the decision to discontinue the earlier JV, the SLPA remains committed to developing modern logistics infrastructure within Port of Colombo to meet the evolving requirements of international maritime trade and supply chains.

Accordingly, the SLPA has decided to pursue an alternative development strategy through the establishment of a new logistics hub under a PPP model, through a competitive bidding process with relevant approvals.

The proposed development will utilise a substantial land area within Port of Colombo to establish a modern, integrated logistics facility capable of supporting a wide range of port-related and value-added logistics activities.

The initiative is expected to facilitate the transformation of Port of Colombo from a predominantly container transshipment hub into a comprehensive maritime and logistics hub, providing enhanced services to shipping lines, cargo owners, logistics operators, and other stakeholders in the international supply chain.

The proposed PPP approach is also expected to create opportunities for private-sector participation, attract investment, optimise the utilisation of valuable port land and infrastructure, and generate sustainable long-term revenue for the SLPA.

The development of an integrated logistics hub is considered an important component of the SLPA’s broader strategy to strengthen the competitiveness of Port of Colombo, improve operational efficiency, and expand its role in regional and international trade.

The SLPA emphasises that the decision not to proceed with the earlier JV does not represent a departure from its commitment to logistics infrastructure development. Rather, it provides an opportunity to pursue an alternative development model that better aligns with the Authority’s strategic priorities, commercial objectives, and the long-term interests of Port of Colombo.

The SLPA said it remains firmly committed to positioning Port of Colombo as a leading maritime, transshipment, and logistics hub in South Asia, while ensuring that future port development initiatives are commercially viable, financially sustainable, and aligned with Sri Lanka’s national economic interests.