Fundraising

Sri Lankan port to seek foreign investment

The Sri Lankan Ports Authorities (SLPA) has confirmed that it will invite investors for the second phase of its Hambantota Port Project. While the first phase of the project is already nearing completion, the second phase will be completed in three and a half years.

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The Sri Lankan Ports Authority (SLPA) has said that it will invite foreign investors into the second phase of its $1.5 billion Hambantota Port Project. A spokesperson from SLPA told Infrastructure Investor that the proposal document that lists the sectors available for foreign investors is currently being prepared and will be ready by end of this month.
 
He said that all sectors, except bunkering, will be available for foreign investors to develop. Bulk cargo handling, storage facility, warehouses, transhipment, operation of LPG, import/export are among some of the sectors that will be open for foreign investment.
 
Meanwhile, the port project has already received interest from about 30 investors, according to local media reports. These include major shipping lines and companies from India, Singapore, Russia, the Middle East, Australia and China. The spokesperson from SLPA, however, refused to comment on this.
 
Reports also suggest that the total cost of the first phase of the project is estimated at $360 million, including $76.5 million for the bunker terminal. The Chinese government has funded 85% of the total $76.5 million development cost to build the bunkering terminal at Hambantota port, with the remaining 15% coming from SLPA.
 
For the second phase, China Exim bank has loaned $77 million to help finance the oil bunkering operations and an additional loan of $400 million for the port has come from the Chinese government, according to media reports. However the SLPA spokesperson said that China will have no role in the operation of oil bunkering facilities as that will be carried out by SLPA.
 
The construction for the first phase of the port project commenced in July 2008 and is nearing completion. The first ship is scheduled to dock at the Hambantota harbour in the second week of November this year. The second phase of the harbour construction project will commence in November at a cost of $800 million and will be completed in three and a half years. Upon construction, this will be Sri Lanka’s second-largest port after the Port of Colombo.