Port Race

Sept 16, 2008 (LBO) - Sri Lanka is hoping to call fresh bids for a container terminal concession in an expanded port in Colombo in October, a government minister said, after an earlier bidding round was abandoned partway through the process.

A breakwater to expand Colombo port is now being built with Asian Development Bank financing.

Sri Lanka's John Keells group already operates a container terminal with shipping giant Maersk.

Port development minister Dilan Perera says "nearly 80 percent" of the work on bid documents have now been completed and authorities are hoping to call tenders in October.

Perera says Sri Lanka should not give the terminal concession to a "competitive operator".

He says Sri Lanka made a mistake in giving management of SriLankan Airlines - the state-run national carrier - to Emirates which was a direct competitor.

Emirates terminated it management contract in March 2008 following unhappy relations with the government.

In the last bidding round, Port of Singapore Authority which bid with Sri Lanka's Aitken Spence group claimed it had gained highest marks in a financial bid, while rival Hutchison of Hong Kong said it should get the tender.

The government cancelled the tender sparking