Port Race

May 02, 2008 (LBO) – The Asian Development Bank (ADB) said Friday it has reached agreement with the Sri Lankan government on a 300 million dollar loan to go ahead with a long-delayed project to expand Colombo port. Although the new south port project was approved by ADB early last year, changes in government bidding requirements for the operator of the first container terminal put the project on hold, an ADB statement said.

"In view of the importance of the timely commencement of the terminal operations, ADB and the Sri Lankan government have agreed to begin the infrastructure and breakwater construction project as the government continues to review bids for a private operator for the container terminal."

The government has said the south port project is required to cater to increasing container cargo volumes and ensure Colombo remains south Asia's transhipment hub.

But it was delayed last year when the government cancelled bids to build the new port's first container terminal as it said it was unable to decided between the two main contenders, Singapore's PSA Corp and HPH of Hong Kong.

Disbursement of the ADB loan was linked to the government awarding the terminal contract through open competiti