Sri Lanka to renovate KKS port in the Northern Province with Indian funding
Daily FT: The Cabinet of Ministers has approved accepting of a financial grant from India to proceed with the renovation of the Kankesanthurai Port (KKS) in Jaffna.
Originally slated for implementation under the Indian credit facility, the project faced setbacks due to higher-than-expected costs estimated by consulting service agencies. Consequently, discussions were initiated with the Government of India to explore alternative funding options.
“Identifying the significance of the project, the Government of India has generously agreed to provide the entire estimated cost required for the renovation of the KKS port,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said at the post-Cabinet meeting media briefing.
Given the setbacks faced by the project, further discussions were held with the Government of India to explore the possibility of completing the project through a public-private partnership (PPP) model.
The move comes following a communiqué issued by the Ports, Shipping and Aviation Ministry in March, noting that the Government of India has pledged $ 61.5 million grant to fully develop KKS port in Jaffna.
It added that the message was conveyed during a meeting between Indian High Commissioner Santosh Jha and Ports, Shipping and Aviation Minister Nimal Siripala De Silva.
“As part of the project, a new breakwater will be constructed and the port will be dredged up to a depth of 30 meters to accommodate deep-draft vessels,” it read.
Originally, on 2 May 2017, the Cabinet approved implementation of the KKS port renovation project under Indian loan funds, with further approval for Project Management Consultant Services given on 18 December 2019.
The proposal to this effect presented by the President Ranil Wickremesinghe in his capacity as the Finance, Economic Stabilisation and National Policy Minister received unanimous approval from the Cabinet of Ministers.
OSL take:
Sri Lanka’s key ports located in strategic points in the country are to be further developed to meet the increasing demand in line with the country’s path of becoming a regional hub. The Colombo Port in the west, the northern KKS Port, the eastern Trincomalee Port and the Hambantota Port in the south are four key ports that account for most of the vessels that call at Sri Lanka. These ports therefore are focal point in the maritime industry and the increasing activities in these ports have resulted in the need for constant uplifting and development of the Port and facilities to meet the growing demand. The Colombo Port is undergoing development work in the form the development of the West Container Terminal and the East Container Terminal. The Trincomalee Port is also tipped to undergo expansion work along with the development of the Trincomalee industrial zone. It is in such a backdrop that the northern KKS port is to be renovated with Indian funding. The expansion work in the ports in Sri Lanka offers many business/investment opportunities to foreign businesses/investors, especially in the development of infrastructure and supplementary infrastructure facilities required by the expanding port facilities. Also, these expansions are also indicative of the improving connectivity between Sri Lanka and the global markets, which in turn expands overall opportunities in key economic sectors in the country.