Sri Lanka to encourage build, operate, transfer style deal for Colombo’s East Terminal
Secretary to Sri Lanka’s President, P.B. Jayasundera has reportedly said the government of Sri Lanka is looking at a build, operate, and transfer (BOT) style deal for Colombo Port’s East Terminal which may require over US$ 500 million in investments from India and Japan.
Jayasundera has said that Sri Lanka would like India and Japan to develop the East Terminal in a deal like the existing South Asia Gateway Terminals (SAGT).
According to reports, the SAGT is built with private equity and debt, for which Sri Lanka Ports Authority (SLPA) or the government is not responsible.
On top of servicing debt, SAGT also pays throughput charges to the SLPA which increases its profits and can be used to repay any other debt during its concession period, the local media has reported.
The Colombo International Container Terminal with China Merchants also has a similar arrangement and after the end of the concession period, which may run into around 30 years, the entire BOT terminal comes back to the state agency, local media reports have further stated.
OSL take:
Sri Lanka’s ongoing development programme has resulted in the opening up of many business/investment opportunities in the island. Business/investment opportunities are on the increase in all key economic sectors. Sri Lanka’s geographical positioning in the Indian Ocean, the ease of doing business environment in the country and the many trade agreements as well as trade concessions enjoyed by the country have made it an attractive business destination in the South Asian region.
| Article Code : | VBS/AT/24122019/Z_5 |