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The Chinese-funded Colombo Port City project, the largest foreign investment project to date in Sri Lanka, has got underway in the past few weeks, following the official start of construction of Phase 1 by the Chinese President Xi Jinping and President Mahinda Rajapaksa, during an official state visit by the former to Sri Lanka in September.
The Port City will be built by a division of the state-controlled China Communications Construction Co. on 233 hectares of reclaimed land, and will include offices, hotels, apartments and shopping centres. The government wants to convert Sri Lanka into a maritime centre, competing with Singapore and Dubai and this project is a key element of this strategy. Sri Lanka will own rights to 125 hectares of the reclaimed land and 20 hectares will be held by China Communications, with the remaining 88 hectares leased to the company for 99 years.
The Port City is located close to the new Colombo International Container Terminal (CICT). It is estimated that the Sri Lanka Ports Authority has invested more than USD 3 billion on all present port development projects including the Colombo Port Expansion Project of which CICT is a part. According to SLPA chairman Dr. Priyath B. Wickrama, “These innovations will not only change the geography and outlook of Colombo but also extend immense strength to the government’s efforts to ensure continuity and dedication towards realizing the goal of making Sri Lanka, the most competitive and preferred maritime and logistics centre in the Asian region.”
Also during the visit of the Chinese president to Sri Lanka, China Merchants Holdings International (CMHI) signed a deal to develop Phase II of the Hambantota Container Port Project, located 240 km to the south-east of the Port of Colombo. This US$600 million investment involves building four new container berths with an annual capacity of 2 million teu. The project will be undertaken through a joint venture formed between China Merchants, China Harbour Engineering Company and the Sri Lanka Ports Authority. CMHI is also to invest in an international shipping centre with a proposed size of 60 hectares, that will offer integrated bonded logistics operations and commercial services, such as bonded warehousing, export processing, entrepot trade, e-commerce distribution and exhibition services in the port of Colombo.
