The Asian Development Bank (ADB) and the Sri Lanka Ports Authority is in the process of holding talks to modify an agreement to avoid further delays in starting work on the ADB -funded breakwater for a new port.

"The breakwater contract system is the need of the hour now and if it is not awarded soon the project would lose one full construction season and this would delay completion of the project," ADB sources said.

There have been discussions between the Sri Lankan Government and ADB to see if there is anyway we can enable the breakwater contract to go ahead while leaving the overall project concept intact, a top official of the Authority said. Work on the container terminal, for which bids have now been cancelled, can only start after completion of the breakwater, which is expected to take 15 months.

"Construction cannot be done during the monsoon season. The Government has now asked the ADB to de-link the two projects to enable work on the breakwater, or harbour wall, to start, an official said.

The award of the concession to run a terminal has been delayed because a Government negotiating committee has not been unable select the bidder after new conditions were set after the bids were opened, its sources said.

Government officials have said it wants to cancel the original tender and call fresh bids. The two leading contenders were the world's biggest port operators, Hutchison Port Holdings of Hong Kong and a consortium led by Port of Singapore Authority in which listed Sri Lankan conglomerate Aitken Spence is a partner.

Other consortia in which local conglomerates John Keells Holdings and Hayleys were partners also submitted bids. The consortium led by PSA Corp came first according to the ranking, with HPH coming second.
(DN 08052008)