China exits logistics hub project in Sri Lanka

20/10/2026 09:55 AST

China Merchants Port Holdings has withdrawn from a proposed $392 million joint venture to develop a major logistics hub at Colombo Port, Sri Lanka's main seaport, but the project will continue with a new investor.

The Sri Lanka Ports Authority (SLPA) said on Monday that the Chinese state-owned company had decided not to proceed with the partnership announced in 2023, citing external circumstances, commercial considerations and shareholder interests.

Under the proposed agreement, China Merchants was to hold a 70 per cent stake in the joint venture, while the SLPA and a Sri Lankan private construction company were each to own 15 per cent.

The SLPA said it was seeking a new investor for the planned 150,000-square-metre logistics hub at Colombo Port, where Chinese companies already have significant investments.

In a statement to the Hong Kong stock exchange, China Merchants said terminating the project would be in the best interests of the parties.

The investment agreement, reached in April 2023, was the first major foreign investment announced after Sri Lanka's economic collapse in April 2022.

China Merchants already operates a $500 million deep-water container terminal at Colombo Port. The company also manages the deep-water port complex at Hambantota on Sri Lanka's southern coast.

The Hambantota port was widely viewed as a controversial infrastructure project launched under former president Mahinda Rajapaksa, who governed Sri Lanka from 2005 to 2015.

Times of Oman