Colombo port expansion plans gather pace with US$ 2Bn pipeline
Colombo, May 29 (Daily Mirror) - The Sri Lanka Ports Authority (SLPA) has unveiled an ambitious investment pipeline reaching up to US$ 2 billion over the next one to three years, aimed at transforming the country's maritime and logistics sector.
Speaking at the Sri Lankan-German Business Forum 2026 in Colombo yesterday, organised by the Delegation of German Industry and Commerce in Sri Lanka (AHK Sri Lanka), Chairman of SLPA Dr Parakrama Dissanayake outlined significant infrastructure expansions designed to position the island as an unbeatable logistics hub.
"We are looking at an investment pipeline reaching up to US$ 2 billion over the next one to three years to transform our maritime and logistics capabilities, transitioning Sri Lanka from a traditional transhipment port into a comprehensive, world-class logistics centre," Dissanayake stated.
The announcement comes amidst increasingly volatile global trade dynamics. "The recent tariff disruptions and supply chain interruptions, particularly in the Red Sea and Suez Canal, have cost the global economy approximately US$ 450 billion in the short term," he explained.
These disruptions have compelled shipping lines to find alternative routes, heavily impacting local exports such as tea destined for the Middle East. Consequently, freight rates for five major shipping lines dropped by 25 per cent in the first quarter of 2026 compared to the same period in 2025. This challenging environment necessitates innovative supply chain solutions, especially considering the top ten global shipping lines currently control 84 per cent of global capacity, accounting for 27.9 million Twenty-foot Equivalent Units (TEUs).
To navigate these structural challenges and attract operators, Sri Lanka must urgently address its capacity crunch at the Port of Colombo. Last year, the port handled 8.3 million TEUs, solidifying its position among the world's top 25 container ports and top 15 for global connectivity.
"Last year, we handled 8.3 million TEUs, but with our current maximum capacity at 10 million TEUs and demand surging to 9.3 million TEUs, our capacity utilisation has surpassed 70 per cent," Dissanayake emphasised. "This creates a bottleneck leading to costly wait times for vessels that we must urgently resolve."
The urgency was further underscored by a rapid 22 per cent growth rate recorded in April 2026. To alleviate the bottleneck, the upcoming induction of the East Container Terminal next year is expected to boost overall capacity to 14 million TEUs against a projected demand of 10.5 million TEUs, while the Hambantota port will add a further 2 million TEUs of much-needed capacity.
Breaking down the US$ 2 billion investment strategy, Dissanayake confirmed immediate plans for commercial expansion. "We plan to call for Expressions of Interest shortly to establish a dedicated logistics hub on a 14-acre land bank located inside the Port of Colombo before the end of this year," he confirmed.
This development is set to be connected to the airport via a new elevated highway, seamlessly reducing travel time for sea-air cargo to just 30 minutes.
In terms of terminal expansion, a massive US$ 600 million investment is already allocated for a 3.4-kilometre breakwater to support the West Container Terminal 2, which will eventually yield an additional 3.3 million TEUs. Furthermore, feasibility and engineering studies backed by the Asian Development Bank (ADB) have commenced for the proposed Colombo North Port project, which is designed to add 11 million TEUs to long-term capacity.
Dissanayake pointed out that Sri Lanka possesses a unique operational model where the SLPA acts as landlord, regulator, and operator across all major commercial ports, including Colombo, Galle, Trincomalee, Kankesanthurai (KKS), and Hambantota. To drive development uniformly, Requests for Proposals (RFPs) will soon be issued for yacht marina operations in Galle and Trincomalee.
With strong backing from multilateral institutions like the World Bank and the ADB, who are currently providing extensive grants for port efficiency and productivity studies, the SLPA expects these mega-expansions to cement Sri Lanka's dominance as a regional trade nexus.
