An artist’s rendering of the proposed South Asia Commercial and Logistics center, which will be the region’s largest logistics center when it is finished by the end of 2025.

• An 8-story, 5 million square foot building with a design storage capacity of 530,000 CBM is going to be erected.
• China Merchants Port Holdings is leading a consortium of investors in the US $ 392 million South Asia Commercial and Logistics Hub.
• SLPA and Access Engineering will each retain 15% interest in the partnership.

The project to develop the largest commercial and logistics complex in South Asia in the Port of Colombo, with an investment of US $ 392 million, was launched yesterday, making significant progress toward Sri Lanka’s goal of becoming a significant logistics hub in the area.

The representatives of the three investing entities formally signed contracts for the construction and operation of the South Asia Commercial and Logistics Hub (SACL) as a 50-year Build-Operate-Transfer (BOT) project in Colombo. China Merchants Port Holdings (CMPort) holds a 70 percent stake in the venture, while the Sri Lanka Ports Authority (SLPA) and Access Engineering PLC each hold a 15 percent stake.

The SACL, a public-private partnership project, will be constructed in the heart of the Port of Colombo and will have an eight-floor structure with a storage capacity of 530,000 CBM. The project’s investment will bring in much-needed foreign capital for Sri Lanka.

The complex’s construction is anticipated to start in the second half of 2023, with a goal of finishing it by the end of 2025. It will be directly connected to the airport through the Port Access Elevated Highway and be close to the Port City and CBD. The five million square foot complex will provide a wide range of facilities and services linked to logistics, including general warehousing, less than container load (LCL), multi-country consolidation (MCC), container freight station (CFS), and several other value-added services.

According to a CMPort representative, after the contract is finalized, the project would bring in US $ 126 million in addition to an upfront payment of US $ 26 million. Additionally, the project is anticipated to generate 10,500 additional indirect work possibilities in addition to at least 1,800 direct employment opportunities.

The project is in line with Sri Lanka’s national development policy to make the nation a significant logistics hub, which is a crucial industry and a major driver of economic development according to the National Policy Framework 2019.

Better logistics and warehousing services will be provided, improving the port’s competitive edge and its hub status as a result. The project will also integrate cutting-edge technology and innovation while enhancing the Port of Colombo’s operational effectiveness.

In terms of connectivity to the shipping network, the Port of Colombo is now listed among the top 13 ports in the world. The port still lacks a cutting-edge, contemporary logistics facility despite its prime location on the route for international trade, the official added. The Port of Colombo primarily handles loading and unloading of cargo at the moment, with little value-added services being provided. The SACL will alter this environment.

Additionally, the project will benefit from the accompanying freeport advantages in its operations, such as no customs clearance for transshipment and MCC goods, resulting in less paperwork and associated expenses. This is because the Port of Colombo was designated a freeport by the Government of Sri Lanka. The project also offers a perfect setting for the registration of hub businesses, which will be eligible for tax breaks on CIT, WHT, VAT, etc.

The project is anticipated to assist the Port of Colombo in boosting its competitiveness versus other regional ports. Additionally, the project’s enhanced services and cost advantages are anticipated to increase container volumes and commerce at the Port of Colombo, benefiting all of its terminals and increasing profits for the port and port-related businesses in Sri Lanka.

The main business of Colombo International Container Terminals (CICT), which oversees the South Terminal of the Port of Colombo, is CMPort, a significant shareholder in the SACL. The largest and most competitive public port developer, investor, and operator in China, CMPort has holdings in Hong Kong, Mainland China, and other countries. 50 ports in 26 countries and regions make up CMPort’s port network portfolio. The goal of CMPort is to improve its key capabilities in global throughput, port service, and management. This goal is driven by the vision “To be a world-class comprehensive port service provider” and supported by its domestic, international, and innovation strategies.