China-built port terminal opens in Sri Lanka capital

A Sri Lankan mega port terminal built by a Chinese company opened in Colombo on Monday, with analysts predicting the facility will help Colombo become a major global shipping hub and allow China to extend its maritime shipping routes.

The $500 million Colombo International Container Terminal (CICT) was built by China Merchants Holdings (International) with the assistance of a $350 million loan from the China Development Bank.

Sri Lankan President Mahinda Rajapaksa declared the facility open.

It will be run by China Merchants Holdings (International) under a 35-year build-operate-transfer agreement.

The project is the result of successful cooperation between China and Sri Lanka, Priyath Wickrama, chairman of the Sri Lanka Ports Authority (SLPA), told the Global Times on Monday via the phone, stressing that the new terminal would make Colombo more than a regional shipping hub.

"Right now we can even talk about competing with other world hubs on a global level," he said.

The Colombo port is located mid-way on a major shipping route linking east and west and the Colombo Page, an online newspaper, said the new terminal will allow Sri Lanka to meet increasing demands for international shipping services in the Indian Ocean.

Agil Hewageegana, chief engineer with the SLPA, told the Global Times on Monday that the new terminal, one of three planned for Colombo Port, is designed to handle mega ships with over 18,000 containers and could handle 2.4 million containers a year.

That makes Colombo the only port with a deep-water terminal for mega container ships in South Asia, according to the official.

Wang Dehua, head of the Institute for Southern and Central Asian Studies at the Shanghai Institutes for International Studies, told the Global Times the CICT project shows that China is willing to share the benefits of its development with neighboring countries.

"Sri Lanka now needs foreign investment to improve its economy after the end of three decades of civil war in 2009 and Beijing's cooperation with Colombo is generating more development opportunities for Sri Lanka," Wang said.

Under the Colombo Port Expansion Project, 10,000 direct and 15,000 indirect employment opportunities have been created, the Sri Lankan government said, according to the Colombo Page.

Sri Lanka is seeking economic growth of 7.5 percent this year, after its expansion cooled to 6.4 percent in 2012 as a faltering global economy sapped demand for the nation's tea and textiles, Bloomberg said.

"The building of the terminal will also help China further cement its maritime shipping lines in the region, especially after similar investments in ports of Pakistan and Nepal," Wang said.

But such cooperation is also raising fears in some countries like India, who suspect Chinese investment in these ports is for military purpose and regional competition.

Wang dismissed such speculation as part of a "cold-war mentality."

Sri Lanka's foreign minister G.L. Peiris told the Global Times in an exclusive interview in late April that "China has never at any time, by word or deed or implication, said that they want to establish a military base in Sri Lanka," adding that his country is not in favor of establishing any foreign military base.

Wickrama said India has nothing to worry about the CICT project. "The port is for commercial use and it will not be used for any strategic military purpose by anyone."

"As a matter of fact, India could also benefit from the CICT. If Indian companies use mega ships at Colombo, this would save time and a lot of money," he noted.

Agencies contributed to this story