COLOMBO: A Chinese state-owned firm has withdrawn from a $392 million joint venture to develop a major logistics hub at Sri Lanka’s main seaport, the key local partner said on Monday.
The Sri Lanka Ports Authority (SLPA) said China Merchants Port Holdings had decided not to proceed with the collaboration announced in 2023, but the project would continue.
“Following an assessment of the prevailing external circumstances, commercial considerations and the interests of the respective shareholders, a decision was reached not to proceed with the proposed joint venture,” the SLPA said in a statement.
China Merchants was to hold 70 per cent of the proposed joint venture, while the SLPA and a Sri Lankan private construction company were each to hold 15pc.
The SLPA said it was now seeking a new investor for the 150,000-square-metre logistics hub at Colombo Port, where China already has other investments.
The Chinese company said in a statement to Hong Kong’s stock exchange that “terminating the project would be in the best interests of the parties”.
China Merchants’ stake, agreed in April 2023, was the first major foreign investment announced after Sri Lanka’s economy collapsed in April 2022.
Within Colombo Port, China Merchants already operates a $500m deep-water container terminal.
The company also manages the deep-water port complex at Hambantota, on Sri Lanka’s southern coast.
That port in Hambantota was widely regarded as one of the white-elephant projects launched by former president Mahinda Rajapaksa, who ruled the country for a decade until 2015.
Source: Dawn
