Sri Lanka: Colombo Port Expansion Project

An efficient port system is key to improving Sri Lanka's competitiveness and helps attract investment. A modern and competitive transshipment hub would allow Colombo Port to attract a larger number of vessels, achieve economies of scale, and thus, lower freight charges. This would help to bring additional foreign exchange to the country and encourage the growth of ancillary industries such as ship chandlery and bunkering, and generate employment opportunities. The strategy of the Asian Development Bank (ADB) is also to encourage public–private partnerships (PPPs) in the ports sector as a part of its efforts to implement the landlord port model1 to increase efficiency. 

The expected impact of the project was to improve the competitiveness and efficiency of Colombo Port. A PPP was expected to attract investors to operate at least one (or more) of the new port terminals. The expected outcomes were as follows: (i) reduced transport costs for exporters, (ii) increased transshipment container volumes handled by Colombo Port, and (iii) increased container-handling capacity of Colombo Port. The expected outputs were (i) completion of dredging, reclamation, and breakwater construction; and (ii) completion of the south container terminal.

This report validates the completion report’s assessment of the project. IED overall assessment: Successful.