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Nov 20, 2007 (LBO) – A Sri Lanka government panel has decided to start negotiations with the front runner for a new container terminal in Colombo with a Port of Singapore Authority and Aitken Spence bid being hot favourites to win the deal, officials said. The cabinet appointed negotiating committee (CANC), which made its decision on Tuesday, will now start negotiating with the most preferred bidder about changes the government may wish to make to the financial proposal put forward by the bidder.

"If there is broad agreement the negotiating committee (CANC) will sign a letter of intent (LOI) with them; after that they have two months to agree on a deal," according to a Ports Authority source.

Close Race

Aitken Spence and PSA Corp combine are in a close race with Hutchison Port Holdings (HPH) for the deal, which will be awarded based on which party offers the highest return on a net present value basis on projected throughput.

In the event that negotiations fall though with the most preferred bidder, the second in line would be able to enter the process.

However the cabinet of ministers has to sanction the bidder and the Attorney General’s department has to grant legal clearance before the CANC can sign an LOI.

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