China CMPort optimistic about logistic hub project in Colombo Port
The Morning: China Merchants Port Holdings (CMPort) is optimistic about its $ 391 million investment in the South Asia Commercial and Logistics Hub (SACL) project in Colombo Port and sees long-term potential for increased throughput due to India and Sri Lanka’s economic growth, China state media reported.
According to the Global Times, CMPort General Manager Lu Yongxin has said that construction of the logistics hub – which will have a total investment of $ 391 million – is expected to begin by the end of this year.
“Talks began in January this year and went through several rounds. The project has achieved phase success,” Lu said.
The investment in SACL, which will be South Asia’s largest logistics hub, brings the company’s investment in Sri Lanka to $ 2 billion, making the company the largest investor in Sri Lanka.
Agreements for the construction and operation of the SACL as a 50-year Build-Operate-Transfer (BOT) project were formally signed in Colombo in April 2023, with CMPort holding a 70% stake, and Sri Lanka Ports Authority (SLPA) and Access Engineering PLC (Access) each holding a 15% stake in the venture.
CMPort’s other projects in Sri Lanka include the Colombo International Container Terminal (CICT) and the Hambantota Port.
Lu told the Global Times that he believed the risks of the projects are controllable, including those from foreign exchange losses, and the CICT project alone offers 1,200 jobs to the local community.
The SACL project is also expected to provide direct employment to a minimum of 1,800 people and create 10,500 other indirect job opportunities.
The company said it has a cautiously optimistic attitude toward the economic outlook for Sri Lanka, which has undergone turmoil but is on an improving track.
“We believe in the long-term development potential of the project, which will definitely get rewarded in terms of increased throughput due to economic growth in India and Sri Lanka,” said Feng Booming, another executive at the company.
“In 2022, despite the shortage of essentials including fuel, our operation in Sri Lanka was not suspended even for one day,” Feng said.
OSL take:
Sri Lanka’s geographical positioning in the Indian Ocean and the many trade agreements as well as trade concessions enjoyed by the country have created many business/investment opportunities in the country’s ports, shipping, maritime and logistics sectors. With the expansion in the country’s overall economy, there is also a need to develop supplementary infrastructure facilities required by the ports, shipping, maritime and logistics sectors in line with the overall increase in business activities. Sri Lanka’s geographical positioning has also created the potential of the country becoming a logistics hub in the region given the close proximity to the international maritime lanes. Given the overall growth and business potential in Sri Lanka’s ports, shipping, maritime and logistics sectors, foreign businesses/investors could confidently explore the expanding business/investment opportunities.
| Article Code : | VBS/AT/20230907/Z_3 |