SLPA to develop new Colombo Port logistics hub after shelving US$280 million joint venture

The Sri Lanka Ports Authority (SLPA) has decided to develop a new logistics hub at the Port of Colombo through a public-private partnership after shareholders agreed not to proceed with an earlier US$280 million joint venture involving China Merchants Port Holdings Company Limited and Access Engineering PLC.

The earlier project was to be developed through South Asia Commercial and Logistics Hub (SACLH), a company established in 2023. China Merchants Port Holdings Company Limited, through a wholly owned subsidiary, held a 70% stake, while the SLPA and Access Engineering PLC each held 15%.

The project envisaged a modern logistics facility with about 150,000 square metres of floor space and was intended to strengthen Colombo’s role as a regional maritime and logistics centre.

The SLPA said the shareholders had decided not to proceed following a review of external circumstances, commercial considerations and their respective interests.

The three shareholders will receive refunds of their equity contributions, subject to regulatory requirements and operational expenses. Around US$29.8 million is expected to be refunded in proportion to their shareholdings.

The SLPA said it would now pursue an alternative development model through a competitively selected public-private partnership, subject to the relevant approvals.

The proposed hub will use a substantial area of land within the Port of Colombo and is expected to support port-related and value-added logistics activities.

The Authority said the project was intended to help transform Colombo from a predominantly container transshipment port into a broader maritime and logistics hub serving shipping lines, cargo owners and logistics operators.

It said the PPP model was also expected to attract private investment, improve the use of valuable port land and infrastructure, and generate long-term revenue.

The SLPA stressed that abandoning the earlier joint venture did not mean it was stepping away from logistics development, but rather that it was pursuing a model it considered better aligned with its commercial and strategic priorities.