Sri Lanka Hambantota Port JV to be operational from November

Sep 25, 2017 (LBO) – Sri Lanka is expecting to commence operations of the Hambantota Port joint venture from November, Chairman of Ports Authority Parakrama Dissanayake said. China Merchants Port Holdings (CMPort), a listed blue chip company in the Hong Kong Stock Exchange has a 99-year lease to handle commercial operations of Southern Hambantota port. “Assuming that the financial closure will take place in end of October, and then we can start from the 1st of November,” Dissanayake said. Dissanayake, however, said on the date from which the concession agreement was concluded; technically the parties have been given six months to complete the condition precedence. “But we are fairly confident that we should be able to start the joint venture operation from 1st of November if all goes well, that’s the intention.” Initial business plan for Hambantota port comprises of five elements; port services, vessel supply & service, port related industry, integrated logistics and business incubator. Meanwhile, Sri Lanka is currently in talks with two Chinese companies about investing up to 3 billion US dollars to build in a new refinery at Hambantota Industrial Zone (HIZ). Laugfs LPG will invest 80 million dollars into Hambantota establishing the largest LPG terminal in South Asia. Laugfs claims that they can achieve 6 percent of current export volume of Sri Lanka by exporting LPG to other countries. Two cement plants are to be established in Hambantota Industrial Zone with an investment of about 200 million dollars. Sri Lanka is also looking at 850 million dollar LNG Power Plant to power up the area. Since Hambantota is a free port, customs duties and other related taxes will be exempted through the BOI for the investments coming into these areas. Under the new Inland Revenue Act, capital allowances will also be offered for investments in HIZ to recover their investment that basically functions as a tax holiday period.