ASIAN DEVELOPMENT BANK GRANTS
US $ 300 MILLION LOAN TO
DEVELOP COLOMBO PORT
By Walter Jayawardhana
The Asian Development Bank announced that Sri Lanka will receive
US $ 300 million to improve Sri lankas main port, Colombo enabling
it to handle the latest generation of container ships.
The statement issued on March 20 said the loan payble in 25 years
will have a grace period of five years.
Colombo Port is a natural transshipment hub for South Asia,
said Prodyut Dutt, a Senior Transport Specialist with ADBs South
Asia Department. In recent years, Colombo Port has lost market
share in transshipment because it does not have the operating capacity
or depth required to berth the latest generation container ships.
When the project is over it will increase Colombo ports handling
capacity from 3.3 million 20 foot containers in 2006 to 5.7 million
by 2010 and eventually to 10.5 million the bank said in a statement.
The bank further said, This expansion will assist Sri Lanka
in generating additional income from transshipment. Foreign direct
investment in the ports sector is expected to increase by about $800
million by 2024.
Under the project a breakwater will be constructed at the Colombo
port sufficient to accommodate three new container terminals.
The Manila based bank said in the statement, The Colombo Port
Expansion Project will be implemented as a public private partnership
project. The public sector will implement the common user harbor infrastructure
works, such as dredging and breakwater construction sufficient to
accommodate three new container terminals.
The private sector will develop and operate the container terminals
which will be built sequentially. The Project will also help establish
a new marine operations center, relocate an underwater oil pipeline
and provide navigational aids, the bank further said.
Due to the ongoing Tamil Tiger insurgency in the country security
measures also have been incorporated into the loan. It further said,
Under the current conflict situation, security measures have
been highlighted and incorporated into the project.
The project will promote Sri Lankas overall economic growth
by improving its international competitiveness with lower transport
costs and faster delivery times. Faster economic growth will bring
benefits to all citizens of Sri Lanka. Through this and other projects,
ADB remains constructively engaged in supporting the country's development
under the current difficult situation.
About the loan the bank further said, The $300 million loan for the
project will come from ADBs ordinary capital resources and be
provided under the conditions of the London interbank offered rate-based
lending facility. The loan, which will have a 25-year term and include
a 5-year grace period, will be administered by the Sri Lanka Ports
Authority under the supervision of the Ministry of Ports and Aviation.