SL port expansion delays flagged as India ramps up competition

SOC on Infrastructure and Strategic Development Chairman MP S.M. Marikkar 

• Parliament oversight committee warns project delays could weaken Colombo’s competitive position
• Seeks impact assessment from India’s Vizhinjam expansion, MSC investment and Hambantota capacity plans
• Calls for audit into procurement delays and accountability for project setbacks

A parliamentary oversight committee has raised concerns that delays in expanding Port of Colombo risks eroding Sri Lanka’s competitive position as India accelerates the development of the Vizhinjam International Seaport and regional port capacity expands.

The concerns were raised by the Sectoral Oversight Committee (SOC) on Infrastructure and Strategic Development during a review of the Sri Lanka Ports Authority’s (SLPA) operations, financial performance, and development program.

The Vizhinjam International Seaport in Kerala, India, is being developed as a deep-water transshipment hub to serve international shipping routes. Located close to major maritime corridors, the port has a natural draft of 24 metres and is designed to handle ultra-large container vessels, reducing India’s reliance on overseas transshipment facilities.

Transshipment is the lifeblood of Port of Colombo and one of Sri Lanka’s most important sources of maritime revenue, employment, and foreign exchange earnings. Around 84.5% of the Port’s container throughput consists of transshipment cargo, with a substantial share linked to India. 

Any shift in transshipment volumes to competing regional ports, particularly those being developed on the Indian coastline, could affect Colombo’s role as the region’s primary hub, with implications for port revenues, logistics services, and Sri Lanka’s wider economy.

The SOC sought explanations from SLPA officials on the competitive pressures facing Port of Colombo, including the rapid expansion of India’s Vizhinjam Port, Mediterranean Shipping Company’s (MSC) investment in the Indian transshipment hub, and plans to expand capacity at Port of Hambantota.

Members also questioned the progress of projects intended to increase Colombo Port’s handling capacity, citing implementation delays, procurement bottlenecks, and the resulting financial implications for the Government.

The Committee stressed that prolonged delays could undermine Sri Lanka’s competitiveness in the regional maritime sector as neighbouring ports continue to expand capacity and attract shipping lines.

It called for a comprehensive audit to determine the causes of project delays and identify parties responsible, while urging the adoption of stronger procurement and project management practices to prevent similar setbacks.

The Committee reviewed the SLPA’s financial performance during the first six months of 2026 and discussed measures required to sustain its profitability, although no financial figures were disclosed.

The discussions also covered the implementation of recommendations previously made by the Committee and the Authority’s 2024 Annual Report.

Members further examined the development of regional ports, including Hambantota, Galle, and Kankesanthurai, as well as the need to strengthen supporting infrastructure and increase the participation of domestic contractors, consultants, and technical professionals in port development projects.

Concluding the meeting, the Committee called for faster implementation of strategic port projects, stronger institutional accountability, and greater transparency to improve the operational efficiency and long-term profitability of the SLPA.

The meeting was chaired by Samagi Jana Balawegaya (SJB) MP S.M. Marikkar and attended by MPs Ajith P. Perera, Manjula Suraweera Arachchi, Chathura Galappaththi, Ravindra Bandara, Dhanushka Ranganath, and Shantha Padma Kumara, together with the Ports and Civil Aviation Ministry Secretary, SLPA Chairman and Managing Director, and other officials.

Port of Colombo is expected to double its container handling capacity to 15 million Twenty-Foot Equivalent Units (TEUs) by the end of 2026. However, the Central Bank of Sri Lanka (CBSL) has cautioned that geography alone will no longer be enough to preserve Colombo’s position as South Asia’s leading transshipment hub, as competing regional ports expand through investment and policy reforms.

“Mere reliance on geographical advantage may no longer be sufficient for Sri Lankan ports in maintaining their position as a leading transshipment hub in the region,” the CBSL said in its last infrastructure report.