Adani’s Colombo port work set to start

COLOMBO : Adani Ports and Special Economic Zone Ltd (APSEZ) will start construction in December on a 3.5 million 20-feet foot equivalent units (TEUs) capacity terminal with an investment of over ₹5,000 crore at Colombo port, its second international project after Myanmar.

The concession agreement for the 35-year Build, Operate and Transfer (BOT) contract is slated to be signed in November, officials briefed on the project said.

Earlier this month, the Sri Lankan government notified that the terminal will be entitled to a 25-year tax holiday under its Strategic Development Projects Act. The tax holiday will start from the earlier of the first year of profits or two years after starting commercial operations.

The planned West Container Terminal (WCT) will fulfil India’s long-standing aspiration for a presence in Colombo port — a regional transhipment hub through which a large portion of India’s export-import cargo containers are transhipped — for strategic and security considerations.

APSEZ will own majority stake of 51 per cent in the terminal, local partners John Keels Holding PLC will hold 34 per cent while the Sri Lanka Ports Authority (SLPA) will have the balance 15 per cent equity.

The WCT will have a 1,400-metre quay wall, water depth of 20 metres, terminal area of about 64 hectares with annual capacity of 3.5 million TEUs.

The first 600-metre quay length will have to be completed and made operational within 36 months of the signing of the BOT agreement. The full 1,400-meter quay wall should be constructed by 48 months.

Colombo Port is the most preferred regional hub for transshipment of Indian containers and mainline ship operators. Indian transhipment containers accounted for 45 per cent or 2.5 million twenty-foot equivalent units (TEUs) of Colombo’s total container transhipment volume of 5.6 million TEUs.

For many years, India has been trying to cut its dependence on Colombo to send and receive container cargo and save extra time and costs for India’s exporters and importers, but without much success. The network impact of this project is significant which is expected to further benefit from the string of seven container terminals across the 12 ports that Adani operates along the Indian coastline handling an annual volume of over six million TEUs.

“This partnership will multiply and accelerate the transhipment options that will become available to serve various shipping lines and other potential port customers across the South Asian waters, benefiting both, India and Sri Lanka in multiple ways,” Karan Adani, CEO and Whole Time Director of APSEZ, said in March while announcing it has received a Letter of Intent (LOI) from the Sri Lankan government to build the terminal.

“The combination of the strategic location of the Port of Colombo as a launching point for transshipment across the entire subcontinent, the deep domestic strength of SLPA and John Keels Holdings and the Adani Group’s unmatched network of container terminals across the Indian coastline opens up several dimensions of growth possibilities for years to come, not just within our two countries but also to the east as well as the west of our two nations,” he said.

Source : The Hindu Business Line