The technical and financial evaluations for the breakwater and dredging of the Colombo South Harbour have been completed with Asian Development Bank (ADB) approving the government evaluations, said ADB Country Director Richard Vokes.

The contract is to be awarded to Hyundai Engineering Construction Co. Ltd at a cost of Rs. 36.3 billion.

He said the Sri Lanka Ports Authority (SLPA) is planning to issue the letter of acceptance as per the bidding process when Cabinet approval is obtained.

"The agreement will be signed only after effectiveness conditions are fully satisfied", Vokes said. The agreement will be signed after the contractor submits a performance bond.

The financial evaluations for the Container Terminal Component is nearing completion and the government is expected to issue an invitation for the negotiation of the Concession Agreement which is an effectiveness condition to the selected private operator.

Vokes said the government is taking steps to implement the Colombo South Harbour Development project which will help consolidate the position of the Colombo Port as a transshipment hub port for the South Asian region.

The completion of the project will provide sufficient container-handling capacity and depth for the latest generation mainline vessels to call at the Colombo Port.

The container handling capacity of each terminal will be 2.4 million TEUs per year. The Colombo Port including South Asian Gateway Terminal (SAGT) handled 3.08 million TEUs in 2006.

He said when the three terminals are fully developed they will provide an additional capacity of 7.2 million TEUs per year. The project aims to increase transshipment cargo which account for 75 percent of Colombo Port's handling in 2006.

A substantial quantity of this cargo will generate from the Indian subcontinent cargo. Without expanding the handling capacity, the Colombo Port will lose its hub status as shipping lines will divert to other ports which have an expanded handling capacity", he said.

The ADB is lending a USD 300 million loan on a 25-year term with a five-year grace period.
(ST - 28102007)