Sri Lanka has signed a $450 million deal with China Merchants Holdings (0144.HK) and local conglomerate Aitken Spence SPEN.CM to boost the Colombo port's cargo-handling capacity, a official said on Tuesday.
The joint venture will build the first of three planned terminals in the Colombo port. Each is expected to add the capability to handle an additional 2.5 million Twenty-Foot Equivalent Units (TEU). The port now handles 4.5 million TEU.
"The tender board has finalised the deal," Sri Lanka Ports Authority Chairman Priyath Wickrama told Reuters. "The total investment is around $450 million."
The state-run port authority is also a partner in the venture but Wickrama declined to say how much each partner was contributing. Two sources familiar with the deal said China Merchants will have a stake of about 70 percent.
The government expects the first phase of construction to begin within six months, with a three-year target for completion.
China Merchants is a holding company for enterprises that specialise in developing transport and infrastructure businesses. Its main business unit operates ports in China.
Sri Lanka is increasingly relying on China and Chinese companies for the financing and expertise required for the more than $6 billion worth of infrastructure investments it has undertaken since the end of a three-decade war in May 2009.
Earlier this month, Sri Lanka opened a new Chinese-built and financed port on its southern coast, along an ancient "Silk Road" trading route and one of the world's biggest East-West shipping lanes.
The joint venture will build the first of three planned terminals in the Colombo port. Each is expected to add the capability to handle an additional 2.5 million Twenty-Foot Equivalent Units (TEU). The port now handles 4.5 million TEU.
"The tender board has finalised the deal," Sri Lanka Ports Authority Chairman Priyath Wickrama told Reuters. "The total investment is around $450 million."
The state-run port authority is also a partner in the venture but Wickrama declined to say how much each partner was contributing. Two sources familiar with the deal said China Merchants will have a stake of about 70 percent.
The government expects the first phase of construction to begin within six months, with a three-year target for completion.
China Merchants is a holding company for enterprises that specialise in developing transport and infrastructure businesses. Its main business unit operates ports in China.
Sri Lanka is increasingly relying on China and Chinese companies for the financing and expertise required for the more than $6 billion worth of infrastructure investments it has undertaken since the end of a three-decade war in May 2009.
Earlier this month, Sri Lanka opened a new Chinese-built and financed port on its southern coast, along an ancient "Silk Road" trading route and one of the world's biggest East-West shipping lanes.