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China Merchants and Colombo to finalise port project deal soon

Jun 13, 2011 Port

Port operator China Merchants Holdings (International) expects to soon finalise a deal with the Sri Lankan government to build and operate a container port in Colombo, reported Dow Jones Newswires.

The Hong Kong-listed company said in September that it and Sri Lankan conglomerate Aitken Spence have entered into a non-binding agreement with the government to build a container terminal adjacent to the existing Port of Colombo, with a designed capacity of 2.4 million TEUs.

China Merchants said earlier it would own a 55 percent stake in the project.

China Merchants is the largest container terminal operator by volume in Shenzhen, mainland China's second-biggest port by volume after Shanghai. It controls nearly all the terminals in the western part of Shenzhen's port, including the Shekou, Chiwan and Mawan container terminals.

Chairman Fu Yuning also said that the company's ports experienced softening demand in the second quarter because of cyclicality, as well as the unrest in the Middle East and renewed concerns on the Europe debt crisis. However, he said he expects demand to pick up in the second half, and forecasts its ports to record 10 percent throughput growth this year, down from growth of 19 percent in 2010.