Sri Lankan Government explores new future for Oluvil Port
The Morning: The Government is exploring alternative ways to develop and utilise the long-idle Oluvil Port on the Southeastern coast of Sri Lanka, with about Rs 57 million being allocated annually for coastal protection and maintenance linked to the facility, to bring the Port back into productive use and unlock the economic value, Minister of Energy, Ports and Civil Aviation Anura Karunathilaka said in Parliament recently. Karunathilake said: “The Government is exploring the best alternative use of the long-idle Oluvil Port to operationalise the port premises at its optimum capacity to provide maximum economic benefit to both the region and the country, and an annual allocation of approximately Rs 57 million is provided for the implementation of the coastal protection and maintenance, as a measure to address the erosion issued association with the Oluvil Port, according to the Coastal Conservation and Coastal Revenue Management Department.”“The move follows the failure of the Port to sustain its intended original operations, where the fisheries harbour commenced the operation from September 2013 until 2019. But the operation was suspended after 2019, while the commercial harbour could not be operationalised due to the required navigational depth, that could not be maintained due to recurring sand accumulation by twoseasons in the year annually,” he said.“Meanwhile, according to the information provided by the Coastal Conservation and Coastal Resource Management Department, compromising armour protection has been constructed along approximately 16.5 kilometres (km) of the coastal line to mitigate the coastal erosion occurring in the vicinity of Oluvil Port,” he added.As cited by The Morning Business as per the National Audit Office (NAO), the Port was developed with an interest-free loan of € 46.009 million from Nordea Bank of Denmark. “This project was completed in 2012, and the final completion certificate was issued on 26 May 2015,” Karunathilaka said.He also added: “Accordingly, a previous attempt to attract an investor through a Request for Proposal (RFP)for the long-term lease of land and buildings belonging to the Sri Lanka Ports Authority (SLPA) at Oluvil Port failed after the investor did not respond to a letter of intent within the stipulated time frame, and the matter was reported to Cabinet in 2025, where the proposal investment was not materialised.”“Despite the steps to operationalise the Port, we still have not found any tangible solution to get the potential investor for this purpose. Upon the successful conclusion of this negotiation, we have received several proposals, but technical and financial issues in the proposals still needed to be resolved before a suitable investor could be selected,” Karunathilaka said.
OSL take:
Sri Lanka’s strategic location along major international shipping routes is creating growing business/investment opportunities for foreign businesses/investors across the ports, shipping and wider maritime services sector, particularly as geopolitical tensions in the Middle East encourage shipping lines to consider alternative routes. The Sri Lankan Government’s efforts to identify a new commercial use for the long-idle Oluvil Port highlight the wider potential to unlock underutilised maritime infrastructure and generate new economic activity. Sri Lanka’s proximity to major East-West sea lanes provides a strong advantage as global shipping patterns evolve. This could create opportunities for investment in port development, container and cargo handling, ship repair, bunkering, logistics, warehousing and maritime support services. The country’s established port infrastructure, including Colombo, Hambantota and other regional facilities, provides a foundation for attracting international maritime businesses seeking to strengthen their presence along Indian Ocean trade routes. As shipping companies reassess routes and supply chains amid heightened geopolitical uncertainty, Sri Lanka could increasingly position itself as a strategic maritime hub, opening new avenues for foreign capital, technology and long-term infrastructure investment.
| Article Code : | VBS/AT/20260915Z_2 |