The Sri Lanka Ports Authority (SLPA) will seek private investment to develop a new logistics hub at the Port of Colombo after an earlier China-backed joint venture was discontinued.
SLPA plans to develop the new facility through a Public–Private Partnership (PPP) and select a private partner through competitive bidding.
The earlier project, planned through the South Asia Commercial and Logistics Hub (SACLH), was designed to create a large logistics facility within the Port of Colombo.
The SLPA had put the proposed investment at about USD 280 million, with around 150,000 square metres of floor space.
China Merchants Port Holdings, through its fully owned subsidiary, held 70% of SACLH. SLPA and Access Engineering PLC each held 15%.
China-backed project ends after delays and commercial concerns
The shareholders decided not to proceed with the SACLH project after reviewing external conditions, the project environment and commercial considerations.
China Merchants Port Holdings confirmed the decision in a filing to the Hong Kong Stock Exchange on October 15, 2026.
In its filing, the Chinese port operator referred to the project as a US$392 million logistics hub. The project was planned under a 50-year build-operate-transfer arrangement.
The three shareholders had invested about US$37.14 million in the project. China Merchants’ subsidiary had contributed about US$26 million.
Under the settlement, SLPA will pay about US$21.9 million to SACLH within 30 days. The shareholders will also receive their share of about US$7.85 million in remaining distributable cash, after applicable deductions and expenses.
The earlier project received Strategic Development Project status in 2023. This provided several tax concessions, including corporate income tax and dividend tax exemptions for 15 years.
However, the project faced delays and implementation problems. Land and regulatory issues also affected its progress.
SLPA opens a new PPP route for Colombo Port logistics
The end of the SACLH project does not mean SLPA is abandoning its plan to expand logistics facilities at the port.
Instead, the Authority plans to use a large area of port land for a new integrated logistics hub.
The facility is expected to support shipping lines, cargo owners, logistics operators and other businesses across the supply chain.
The PPP model will give private companies an opportunity to invest in and develop the facility. SLPA plans to select the partner through a competitive bidding process, subject to the required approvals.
The Authority expects the model to bring in private investment and improve the use of valuable port land and infrastructure. It also expects the project to generate long-term revenue.
The new hub forms part of SLPA’s plan to expand the Port of Colombo beyond its main role as a container transshipment hub.
A wider logistics operation would allow the port to handle more port-related and value-added services for international trade.
SLPA said the new approach will better match its commercial goals and the long-term needs of the Port of Colombo.
The Authority has not yet announced the investment value, private-sector partner or construction timeline for the new PPP project.
Last modified: October 19, 2026
