CMPort to invest USD 392 Mn to build largest logistics complex in S. Asia
China Merchant Port Holdings (CMPort) is to ink an agreement with Sinopec to set up bunkering operations in Sri Lanka. The Company is the largest oil and petrochemical products supplier and the second-largest oil and gas producer in China.
This development comes after Power and Energy Minister Kanchana Wijesekera announced that the Cabinet of Ministers has granted approval for allowing China’s Sinopec, Australia’s United Petroleum and RM Parks of the USA, in collaboration with multinational Oil and Gas Company – Shell plc, to enter the fuel retail market in Sri Lanka.
The Minister said that each of the three companies would be given 150 dealer-operated fuel stations, which are currently operated by Ceylon Petroleum Corporation (CPC). A further 50 fuel stations at new locations will be established by each selected company, he said.
CMPort on Friday also pledged an investment of USD 392 million (holding a 70% stake), to launch a project to build the largest commercial and logistics complex in South Asia in the Port of Colombo. This would be a joint venture with a total value of USD 400 million with Sri Lanka Ports Authority (SLPA) and Access Engineering PLC (Access) each holding a 15% stake in the venture.
A Spokesperson for CMPort said the project will result in an infusion of US$ 126 million in addition to an upfront payment of US$ 26 million after the agreement is signed. The project is also expected to provide direct employment to a minimum of 1,800 people and create 10,500 other indirect job opportunities. Agreements for the construction and operation of the South Asia Commercial and Logistics Hub (SACL) as a 50-year Build-Operate-Transfer (BOT) project were formally signed in Colombo by representatives of the three investing entities.
The project will provide better logistics and warehousing facilities and services, enhancing the Port’s competitive advantage and consequently strengthening its Hub status.
The project will also improve the operational efficiency of the Port of Colombo and introduce leading-edge technology and innovation. The five million-square-foot complex will offer the full gamut of logistics-related facilities and services such as Less than Container Load (LCL), Multi-Country Consolidation (MCC), Container Freight Station (CFS), general warehousing and various other value-added services.
CMPort, which had invested $974 million in the Hambantota International Port (HIP), and owns 85 percent of the shares, will also invest in this project.