China Merchants Group, a Chinese state-owned firm, said it plans to take its investment in Sri Lanka to two billion US dollars by building a major logistics hub.
AFP reported the investment in a large logistics complex at Colombo Port, with an estimated construction cost of 392 million USD, is the first major foreign investment in Sri Lanka since defaulting on its foreign debt last year.
The logistics centre project will take CMG’s “accumulated investment in Sri Lanka to... over 2 billion US dollars, making it the largest foreign investment enterprise in the island”, the company said in a statement.
CMG will have a 70 percent stake in the company set up to build the logistics complex at Colombo, the only deep-sea port between Dubai and Singapore.
Describing the project as South Asia’s largest logistics hub, CMG said it expects to complete it by the end of 2025.
CMG also manages the port complex at Hambantota on the southern tip of Sri Lanka.
Unable to repay a huge loan taken from China in 2017 to build Hambantota port, Sri Lanka handed it over to CMG for 1.12 billion USD on a 99-year lease.
Sri Lanka has insisted that its ports will not be used for any military purposes.