Colombo: Sri Lanka on Monday launched a USD 500 million Chinese-funded port project aimed to transform the Colombo port into a strategic shipping hub along the world`s most lucrative trading route.
President Mahinda Rajapakse commissioned the mega million container terminal by symbolically loading the first container onto a ship.
"We want to capitalise on the geographical location and to give economic benefits to people who will be born tomorrow," Rajapaksa said addressing the gathering.
With a new breakwater, deeper basin, and the first of three modern new terminals now open, Colombo Port can accept the latest generation of 18,000 20-foot equivalent units (TEU) container ships and has facilities to send goods faster and more cost efficiently to other ports in the region, officials said.
The port`s capacity will eventually be increased from the current 5 million containers to 12.5 million containers per year, according to the Sri Lanka Ports Authority (SLPA).
The terminal is 85 per cent owned by state-run China Merchant Holdings International, with the rest owned by the SLPA.
The involvement of China Merchant comes after Beijing sealed a deal in January to acquire Pakistan`s Gwadar port. The company is also building a USD 14 million "dry port" in Nepal close to Tibet.
Both projects have raised concerns in India over China`s activities in its neighbourhood.
The Asian Development Bank (ADB) provided a USD 300 million loan for the construction of breakwater infrastructure.
"The Colombo port is extremely well located to serve the Indian subcontinent region. The enhanced deep water facilities at Colombo Port will strengthen its strategic position on the key Asia-Europe shipping route, and would significantly boost regional trade," Xiaoyu Zhao, Vice President of the ADB, said.
The project was developed on a public-private partnership basis.