West Container Terminal project: Agreements signed with Adani Ports, other partners

The shareholder, site lease and financing agreements for the Colombo Port’s West Container Terminal (WCT) were signed on Friday and the first instalment of a premium of US$ 15mn will be deposited with the Sri Lanka Ports Authority (SLPA) within days, officials said.

“All official matters are completed,” confirmed SLPA Chairman Prasantha Jayamanna. “They previously carried out activities inside the port, such as starting office complexes and mobilising their contractors, as investors but they will now proceed as Colombo West International Terminals (CWIT).”

The premium that is paid will be used by the SLPA as its equity share in the project, Dr Jayamanna said. The shareholder agreement was signed between the SLPA, India’s Adani Ports, local private sector partner John Keells Holdings (JKH) and CWIT. Adani Ports holds 51 percent of equity, JKH has 34 percent, and SLPA controls 15 percent.

The site lease agreement is between the SLPA and CWIT while the financing contract was entered into between CWIT and Adani Ports. They all came into effect on Saturday, officials said.

The WCT was gazetted as a strategic development project in November 2021. It is a 35-year build, operate and transfer (BOT) public-private partnership with an envisaged investment of US$ 650mn. In Phase I—lasting 36 months from the date of the BOT agreement—a 600m of the quay wall and terminal area will be completed and operations started.

Under Phase II, the full length of the quay wall of 1,400m will be finished and operations started within 48 months of the date of the BOT agreement. And Phase III envisages the completion of the entire terminal and all operations started within 60 months from the date of the contract.

Meanwhile, the SLPA started dredging the East Container Terminal on Feb. 2, the chairman said. The civil work contract was awarded to China Harbour Engineering Company. Equipment has been ordered in tandem and it is expected that the June 2024 deadline will be kept for full operations to start.

The initial outlay will be from the SLPA. However, last year the Authority invited expressions of interest from eligible domestic and international banks and financial institutions, jointly with offshore loan syndicating partners, to provide a USD term loan for SLPA to buy the required equipment and a terminal operating system (TOS) valued at around US$ 325mn.

“SLPA shall use its own internally generated funds to finance the remaining investment requirement for ECT,” the advertisement said. Bids from five parties are under evaluation, Dr Jayamanna said.

The Authority has already developed 575m of the quay wall, adjacent yard area and connected facilities. It requires more funds for the remaining civil construction of the 1,320m quay wall, the container yard, related facilities and for equipment and TOS.