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In an initiative to position Colombo Port as an internationally competitive Port in South Asia, decision have been taken to expand private sector participation in the port sector, commercialize public sector operations and improve efficiency of port operations and to adopt a strategic approach to enlarge the Port, said National Council for Economic Development Executive Director Rohantha N.A. Athukorala.

In the medium term budgetary framework, it is proposed to upgrade Colombo Port to the level of a major hub Port (lead Port in the region) and expects to increase the total annual container handling capacity from 2.2 million TEUs in 2004 to 4 million TEUs by 2009.

Port services continue to face new challenges from regional competition, specially, the new ports developed in the Middle East and South India. Enhancing productivity, efficiency and competitiveness with facilities to accommodate the growth in demand is essential to challenge the risk of neighbors attracting major shipping lines.

These challenges are addressed through the ADB supported Colombo Port Efficiency and Expansion Project and help to fulfill the long term objective of developing the Port of Colombo as the shipping center and hub port in the region by supporting expansion of port infrastructure and improvement of Port efficiency.

The US $ 10 million project for consultancy services, which commenced on in May 2002, has been extended upto August 2006.The project components include the reviewing of Port Legislation and Regulation - Draft Act for Port regulator is under study. Reform studies of Port - JCT corporatisation proposal has been completed for implementation. South Harbour business plan -Preparation of South Harbour Project - detailed design of new South Harbour of Colombo has been drawn up.

South Harbour Development Project: Proposed harbour will accommodate bigger container vessels with a draft of 16 meters and will have 4 terminals, each terminal 1200 m in length to accommodate 3 berths with alongside depths of 18 m and provision to deepen to 23 m to accommodate deeper draft vessels in the future.

The new capacity will be 9.6 million TEUs in 4 terminals. The development phase 1 of the Colombo South Harbour will be carried out in 3 stages. The first phase involves basic infrastructure (such as breakwater) with public funds amounting to US $ 350 million and stage one terminal with private sector participation amounting to US $ 300 million.

The project will be operational on BOT basis with private sector participation. The terminals under stage 2 and 3 will be developed sequentially.

A poverty impact assessment of the Colombo South Harbour Development Project reveals that the project alone by expanding economic opportunities will reduce by 5% during the decade to come. The Colombo South Harbour with deeper depths to serve mega ships carrying over 8000 - 9000 containers is expected to commence construction in 2006 and is considered as a major effort to upgrade the Colombo Port to make it a hub port in the South Asian Region.

Achievements to date;

Reform study for JCT Corporatisation including Business Plan for JCT has been completed. Preparation of Business Plan for Colombo South Harbour has also been completed along with the Preparation of Engineering Design, EIA Report, Poverty and Social Impact study.

Preparation of Procurement Documents is been finalized as funding sources to finance the public sector needs to be agreed.

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