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Feb 24, 2008 (LBO) -- Sri Lanka will cancel a controversial deal for a container terminal at Colombo port and bring new conditions after a consortium led by the Port of Singapore Authority (PSA) won a financial bid, a media report said. The deal hit newspaper headlines with port workers alleging that state-run Sri Lanka Ports Authority (SLPA) was influencing the deal in favour of Hutchison Port Holdings of Hong Kong, whose bid had come second on a ranking.


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Bids for a concession to run a container terminal in the expanded Colombo Port was originally called on February 23, 2007 to close on June 12, 2007, a Sri Lanka's ports ministry document published in The Nation newspaper said.

The ministry is headed by Sri Lanka President Mahinda Rajapakse's brother, Chamal.

Hutchison Port Holdings and PSA with Sri Lanka's Aitken Spence were two of five parties that responded to a request for proposals.

PSA Aitken Spence was ranked first followed by Hutchison while another consortium made up of Sri Lanka's Hayleys and Carson's groups and Terminal Link SA, came third.

Port engineers had then written a letter to the ports minister alleging that the Ports Authority was "hell-bent" on awarding the project to H