China Decides to Abandon Colombo Port Logistics Hub Project

20-Oct-2026

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Both parties have decided to abandon the proposed commercial and logistics hub project at the Port of Colombo, which was to be developed with the backing of China Merchants.

Following the decision, the Sri Lanka Ports Authority has agreed to refund the US$21.9 million invested in the project.

China Merchants Port Holdings formally announced its withdrawal from the proposed five-storey South Asia Commercial and Logistics Hub project at the Port of Colombo.

In a statement submitted to the Hong Kong Stock Exchange, the company said that, after evaluating the project in light of changes in external circumstances, the conditions and timeline for implementation, and the commercial considerations of the parties concerned, it had concluded that terminating the project would be in the best interests of both parties.

In December 2023, the Sri Lankan Government declared the project a Strategic Development Project through a Gazette notification and granted generous tax exemptions for 15 years, including exemptions from corporate income tax and capital gains tax.

Although the project has now been declared discontinued, no evidence that the relevant Gazette notification has been revoked has yet appeared on the website of the Department of Government Printing.

Sri Lanka had also granted the company exclusive rights for 50 years to operate the logistics hub at the Port of Colombo.

It has been stated that, following the cancellation of the project, the funds invested to date will be refunded and both parties will reach a comprehensive and final settlement on all matters relating to the project.