Financial Scrutiny

July 30, 2009 (LBO) – Sri Lankan authorities have begun evaluating the financial proposal of the sole bid by China Merchant Holdings and Aitken Spence for a new container terminal in Colombo port, officials involved with the project said. The new port, which has been delayed for years, is needed urgently to cater to the bigger vessels now being deployed on trade routes in order to maintain Colombo’s position as south Asia’s transhipment hub.

Interest shown by shipping lines and global port operators before bids closed led to expectations it would attract many bids, given the potential growth in transhipment cargo from India.

Officials have said they believe only one bid came because of the global credit crunch with many companies not generating enough cash to make long-term investments.

Investments by Chinese companies are increasing in the island with China Harbour Engineering Company building a new port in southern Hambantota and a big coal-fired power plant. “We opened the financial bid yesterday and have started evaluating it,” said an official, referring to the bid by the consortium consisting of China Merchant Holdings, a big Chinese port operator, and local conglomerate Aitken Spence.

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