Industry News2

Battle for new port in Colombo begins

Bid for Southern most terminal of new South harbour draws JKH-SAGT teaming with Malaysia’s West Port holding firm, Hayleys-Carsons consortium partnering CMA CGM port arm, Aitken Spence in tie up with Port of Singapore ; Hutchison and Hanjin Shipping also in the fray

The battle to build Sri Lanka’s newest and most competitive terminal in the Colombo port has begun with some of the best of corporate names locally and in the global shipping arena expressing firm interest.

When the deadline for submission of Expression of Interests (EOI) ended yesterday afternoon, five parties had communicated their firm interests along with host of plans and other information based on the exhaustive Requests for Proposals (RFP) document.The five parties are existing player John Keells Holdings-South Asia Gateway Terminals (which manages the Queen Elizabeth Quay in Colombo port) in partnership with Pembinan Ridzai Berhard, the owning company of Malaysia’s successful Westport; diversified and maritime heavy blue chip Hayleys in partnership with conglomerate Carsons and French global carrier CMA CGM’s port arm Terminal Link and Logistics heavy conglomerate Aitken Spence in partnership with world class operator Port of Singapore Authority (PSA). The other two are world famous Hutchison Terminals of Hong Kong and global carrier Hanjin Shipping with its local agents Navigation Maritime.

The Government via the Ministry of Ports and Aviation called for EOIs from interested but qualifying parties to build and operate what would be the most competitive and modern terminal under the proposed South harbour of the Colombo port.

The specific project to which EOIs were called involves building a terminal with 3 berths that could handle around 2.4 million Twenty-foot Equivalent Units (TEUs). Industry experts estimate the terminal to cost around or over US$ 500 million.

One of the qualifying criteria to bid is the interested parties/consortia should have had handled around 2 million TEUs including 600,000 TEUs as transhipment in two terminals or more terminals in the past 2 years.

Sources said that the relevant Government appointed Committees will study the EOIs along with various technical and other proposals submitted before shortlisting the bidders. It is envisaged that the selection of the successful party for the awarding of concessions agreement would be finalized within 60 days from yesterday.

The mega 12-berth South harbour project of the Colombo port has two other terminals proposed in addition to the southern most one, to which EOIs were received yesterday.

The other two are the Eastern terminal and the Western terminal. The latter will be alongside the breakwater to be built shortly.

The breakwater costing over US$ 400 million is receiving Asian Development Bank (ADB) funding. For building of the breakwater, the Government has received four bids namely Hyundai and Hanjin of South Korea, China Harbour Corporation and a consortium led by a Danish construction firm.

The proposed first terminal will enjoy a free five year period before work on the any of the other terminals begins under the South harbour project.

Dominated by the Sri Lanka Ports Authority managed Jaya Container Terminalsand ably supported by JKH’s SAGT, the Colombo port, which handled 3 million TEUs in 2006 is the biggest and most equipped and modern in South Asia and has been enjoying relatively high growth in business volume. However Colombo is facing growing competition from Dubai and Singapore while its hub status as well as scope for future traffic is under threat due to massive port development activities in several Indian ports.

In this context the mega South harbour project, which is late by a few years, would significantly enhance Colombo’s superiority if completed sooner than later.