China Merchants Holdings (International) Company (CHM), a subsidiary of China Merchants Group, is discussing investment in the still-under-construction East Container Terminal with the Sri Lanka Ports Authority (SLPA).
CHM is expected to get a 49% stake of the East Container Terminal at most, according to Sri Lanka’s regulations on joint ventures, and SLPA will own 51% stake of this terminal.
CHM already holds 85% of the stake in Colombo South Harbour, and its shares of the Colombo port will increase if the investment in the East Container Terminal goes ahead.
Considering the well operated Colombo South Harbour, CHM has a better chance to win the bid for the East Container Terminal, said ports minister Arjuna Ranatunga at a media briefing.
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The Colombo South Harbour is capable of catering to the mega-ships with an 18 m draught, which would also be made available at the East Container Terminal as well. The total investment for the south harbour is USD550 million, which made it the largest project run by a foreign company in Sri Lanka.
Last year, the south harbour has handled a total of 680,000 teu, which resulted in a 14% annual increase of total throughput of the Colombo port.
Driven by the ‘One Belt, One Road’ policy, CHM is increasing its investment in ports overseas. At present, its projects are mainly in South Asia and Africa, including Sri Lanka, East Africa, and Nigeria. China Merchants Energy Shipping, another subsidiary of China Merchants Group, is also expected to benefit from those projects.