Adani Ports to begin construction of Colombo Port in December

Adani Ports and Special Economic Zone Ltd (APSEZ) will begin construction in December on a 3.5 million 20-feet foot equivalent units (TEUs) capacity terminal with an investment of more than Rs 5,000 crore at Colombo port, its second international project after Myanmar. The officials briefed on the project told the media that the concession deal for the 35-year Build, Operate, and Transfer (BOT) contract will be signed in November. Earlier this month, the Sri Lankan government informed that the terminal would be entitled to a 25-year tax holiday under its Strategic Development Projects Act. The tax holiday will begin from the earlier of the first year of profits or two years after commencing commercial operations. The proposed West Container Terminal (WCT) will meet India’s long-standing aspiration for a presence in Colombo port — a regional transhipment hub through which a big part of India’s export-import cargo containers are transhipped — for strategic and security concerns. APSEZ will hold a majority stake of 51% in the terminal, local partners John Keels Holding PLC will own 34% while the Sri Lanka Ports Authority (SLPA) will have the remaining 15% equity. The WCT will have a water depth of 20 metres, a 1,400-metre quay wall, terminal area of nearly 64 hectares with a yearly capacity of 3.5 million TEUs. The first 600 metre quay length will have to be built and made operational in three years of the signing of the BOT agreement. The full 1,400-meter quay wall should be built within four years. Colombo Port is the most preferred regional hub for the transhipment of mainline ship and Indian container operators. Indian transhipment containers are estimated for 45% or 2.5 million twenty-foot equivalent units (TEUs) of Colombo’s total container transhipment capacity of 5.6 million TEUs. For many years, India has been seeking to decrease its dependence on Colombo to send and receive container cargo and save extra time and costs for India’s exporters and importers, but without much progress. In March, CEO and Whole Time Director of APSEZ, Karan Adani, while declaring it has received a Letter of Intent (LOI) from the Sri Lankan government to construct the terminal, told the media that this partnership would increase and stimulate the transhipment options that will become available to help many shipping lines and other potential port customers across the South Asian waters, helping both, India and Sri Lanka in multiple ways. Image Source Also read: Colombo Port City project: India concerned over project Also read: India increasingly concerned over China’s influence on Sri Lanka port city project