Dr Sarath Obeysekera

News

Sri Lanka looks for international investors for 108 acres near southern port”

Tuesday June 16, 2026 2:51 pm

The Government’s decision to invite international investors to develop 108 acres of land near the Hambantota International Port (HIP) through a 50-year lease is both timely and significant. With global shipping patterns being reshaped by geopolitical tensions in the Middle East and increased vessel movements through the Indian Ocean, Sri Lanka has an opportunity to position Hambantota as a major industrial and logistics hub.
However, the country should avoid the mistake of simply offering land and waiting for any investor to propose projects. Instead, the Government must identify and actively promote a set of strategic industries that can leverage Hambantota’s unique geographical advantages and generate long-term economic value.

Among the industries that deserve priority consideration are:

• Petroleum and energy storage tank farms
• Petrochemical and lubricant blending facilities
• Bunkering and marine fuel services
• Container freight stations and logistics parks
•

 Ship repair and offshore engineering services where Middleeastern base  Industires are nor searching to move out due to uncertainty in Middle East 

 Renewable energy and green hydrogen projects
 can be attracted to carry out assembly of modules 

 Mineral processing and value-added exports
• Warehousing and regional distribution centres

A particularly noteworthy missed opportunity was the proposal made several years ago to establish a one-million-ton petroleum tank farm in Hambantota.

 A leading tank farm operator Star Tanks from Jebel Ali had reportedly submitted a comprehensive proposal to develop such a facility. Unfortunately, the project did not proceed, partly due to a lack of institutional support and resistance from stakeholders within the petroleum sector.

Had Sri Lanka pursued this investment, the country today could have possessed a substantial strategic petroleum reserve capable of cushioning domestic supply disruptions and price volatility. Beyond energy security, such a facility would have generated employment, foreign exchange earnings, and positioned Hambantota as an important regional energy trading and bunkering hub serving South Asia and East Africa.

The present call for investors should therefore be accompanied by a clear master plan identifying the industries Sri Lanka wishes to attract and the incentives required to secure world-class investors. Strategic investments should be pursued proactively rather than reactively.
Hambantota’s location at the crossroads of major east-west shipping routes gives Sri Lanka an opportunity that few countries possess. The challenge is not merely leasing land but ensuring that the right industries are established to create enduring economic value, strengthen national resilience, and transform Hambantota into a globally competitive industrial and maritime hub.

Dr Sarath Obeysekera