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Asian Development bank gives 300 million dollar loan to improve Colombo port

By Walter Jayawardhana

ASIAN DEVELOPMENT BANK GRANTS US $ 300 MILLION LOAN TO DEVELOP COLOMBO PORT

The Asian Development Bank announced that Sri Lanka will receive US $ 300 million to improve Sri lanka’s main port, Colombo enabling it to handle the latest generation of container ships.

The statement issued on March 20 said the loan payble in 25 years will have a grace period of five years.

“Colombo Port is a natural transshipment hub for South Asia,” said Prodyut Dutt, a Senior Transport Specialist with ADB’s South Asia Department. “In recent years, Colombo Port has lost market share in transshipment because it does not have the operating capacity or depth required to berth the latest generation container ships.”

When the project is over it will increase Colombo port’s handling capacity from 3.3 million 20 foot containers in 2006 to 5.7 million by 2010 and eventually to 10.5 million the bank said in a statement. The bank further said, “This expansion will assist Sri Lanka in generating additional income from transshipment. Foreign direct investment in the ports sector is expected to increase by about $800 million by 2024.”

Under the project a breakwater will be constructed at the Colombo port sufficient to accommodate three new container terminals.

The Manila based bank said in the statement, “The Colombo Port Expansion Project will be implemented as a public private partnership project. The public sector will implement the common user harbor infrastructure works, such as dredging and breakwater construction sufficient to accommodate three new container terminals.”

The private sector will develop and operate the container terminals which will be built sequentially. The Project will also help establish a new marine operations center, relocate an underwater oil pipeline and provide navigational aids, the bank further said.

Due to the ongoing Tamil Tiger insurgency in the country security measures also have been incorporated into the loan. It further said, “Under the current conflict situation, security measures have been highlighted and incorporated into the project. The project will promote Sri Lanka’s overall economic growth by improving its international competitiveness with lower transport costs and faster delivery times. Faster economic growth will bring benefits to all citizens of Sri Lanka. Through this and other projects, ADB remains constructively engaged in supporting the country’s development under the current difficult situation.

About the loan the bank further said, The $300 million loan for the project will come from ADB’s ordinary capital resources and be provided under the conditions of the London interbank offered rate-based lending facility. The loan, which will have a 25-year term and include a 5-year grace period, will be administered by the Sri Lanka Ports Authority under the supervision of the Ministry of Ports and Aviation.

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March 21, 2007 - Posted by | South Asia, World News

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