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of two ports
The depth would be deepened to 23 metres under Stage II. The second
phase of the project, estimated to cost around $ 750 million, includes
container terminals and was expected to be completed by 2014 while the
third phase was to include a dockyard.
When completed, the harbour will accommodate 33 vessels at any given
time, making it the largest port in South Asia. The new port complex
acquired 1,500 hectares of land while Colombo Port consists of only 300
hectares.
Construction and opening
Following the finalisation of the detailed feasibility study and planning in
2007, construction commenced in January 2008. Construction of the port
was awarded to the China Harbour Engineering Company and Sinohydro
Corporation. In terms of expenses, China Exim Bank funded 85% of the $
361-million first phase while the balance 15% was borne by the Sri Lanka
Ports Authority.
The construction of the first phase was expected to be completed by May
2011 but was opened six months ahead in November 2010 with the
berthing of the naval ship Jetliner to coincide with Rajapaksas birthday.
The inauguration of the second phase of the port development project
commenced on the same day.
Controversy
The opening of the port ahead of schedule created a controversy. In the
hurry to open it, the contractor was ordered to remove the cofferdam to
connect the port to the sea. The action prevented the contractor from
removing rocks near the port mouth, although a small vessel such as the
Jetliner could enter.
Finally, the contractor had to resort to the underwater blasting of rock and
claimed $ 100 million as additional expenses. The issue was resolved when
the Government agreed to pay $ 40 million. The total cost of Stage I,
including the 17-storied administration building, cost the country $ 650
million.
Vehicle transhipment
The Hambantota Port came in for severe criticism due to its rare use. So the
SLPA decided to divert all vehicle shipments to the Hambantota Port from
June 2012. The port started Transhipment Operations with the first vehiclecarrier from Japan containing 15 vehicles. Shortly thereafter, the facility
became popular with Japanese, South Korean and Indian carmakers that
commenced transhipping increasing numbers of vehicles through the port.
In the first nine months of 2014, the number of vehicles handled at
Hambantota crossed the 100,000 mark, with the number of ship calls
doubling to 161.
Ship bunkering
The construction of the fuel terminal commenced in October 2009 costing $
76 million. Under the project, 14 tank farms were established with a
capacity of 80,000 tonnes. The bunkering facility was operated by stateowned Lanka Maritime Services Ltd. In Colombo, ship bunkering is offered
by seven organisations, including the state-owned Ceypetco.
Hambantota commenced operations in June 2014 and became popular.
However, its popularity was marred by allegations of corruption. It was
alleged that the purchase of fuel at higher prices had resulted in massive
losses. Finally the facility had to be closed down. Now it is being proposed
to award the bunkering to private operators like at the Colombo Port.
Water-filling in second phase
The excavation of the Hambantota Harbour Stage 2 basin
has been completed, and the filling of the port basin with
seawater began in July 2015. The filling is expected to take
50 days. When the basin is filled, the 110-metre-long
cofferdam separating Stage 1 and 2 will be removed.
The completion of berths, the procurement and installation
of container handling equipment and the development of
roads and a water and electricity supply is expected to be
completed before the end of this year.
The development of Hambantota Stage 2 is being carried
out by China Merchants Holdings (International) Company
and China Harbour Engineering Company Ltd. under an
agreement signed with the SLPA in September 2014 for a
total investment of $ 601 million. The agreement allows
the Project Company the right to operate the Hambantota
Ports new container terminal for 35 years. The terminal
will comprise two 100,000 DWT container berths and two 10,000 DWT
feeder berths.
Colombo South Harbour
By 2000, the Colombo Port possessed three container terminals including
seven container berths and four feeder berths. Container handling was
carried out by South Asia Gateway Terminals (SAGT) and by the SLPA. With
shipping lines acquiring mega carriers and ports in the region being
improved, the Colombo Harbour needed to improve its facilities to
accommodate expanding transhipment cargo demand and its survival was
under threat.
The SLPA hired 16,000 employees of whom 6,000 were involved in
container work. In 2005, SAGT, employing 1,000 workers, handled more
delayed further.
The award of breakwater tender
The Government managed to convince the ADB about the move and the
tender for the breakwater was awarded to the Hyundai Engineering &
Construction Company of Korea, which was the lowest bidder.
The contract for the Harbour Infrastructure work was awarded at $375.1
million, whereas the earlier offer was $ 320 m. Construction commenced in
April 2008, with a construction period of 48 months, with the ADB
contributing $ 300 m and the SLPA contributing the balance. Construction
was completed in July 2013.
Retendering of South Terminal
The SLPA called for fresh tenders for the terminal in February 2009 and 10
companies collected the bid documents. However, when bids closed in May
the project received just one bid, said to be due to the then global
recession, in comparison with the five bids received when the request for a
tender was initially made in June 2007.
The successful bidder was China Merchant Holdings-Aiken Spence
consortium which submitted their offer for the privilege of the 35-year BOT
deal, for the construction and operation of the South Terminal. Their bid was
considerably lower than the previous bid, causing the Government to lose
millions by not selecting a candidate from the first round of bids.
The agreement was signed in August 2011 and the CICT commenced
construction work of the terminal in December 2011.
With an envisaged investment of US $ 500 million, including the installation
of state-of-the-art terminal equipment, the project constituted the single
largest foreign direct investment in Sri Lanka by a private entity.
During the implementation period Aitken Spence withdrew from the
consortium and their share was bought by CICT, which became the sole
investor. The new terminal was opened on 10 August 2013, with the arrival
of CMA CGM Pegasus, with a carrying capacity of 11,400 TEU, the largest
container ship to anchored in the Colombo Port.
East Terminal
The first phase of 400 metres of the 1,200-metre-long East Terminal
developed by the SLPA, constructed by Hyundai of South Korea, opened in
April 2015 and the balance is expected to be completed by November
2016.
Although a Chinese cargo ship berthed for the opening, the terminal did not
have unloading facilities and unloading was carried out with the ships
cranes. Container handling would require the installation of necessary
equipment. In June 2015, Cabinet gave approval to request for tenders for