US$500 million Chinese-built port for megaships opens in Sri Lanka

A US$500 million Chinese-built port opens today in Sri Lanka, giving Beijing a vital foothold on the busiest international shipping lane as it seeks to secure maritime supply routes.

The massive terminal in Colombo is located midway on the lucrative east-west sea route and has facilities on a par with Singapore and Dubai.

The Colombo International Container Terminal, which is 85 per cent owned by the state-run China Merchant Holdings International, is designed to handle megaships - a first for Sri Lanka which is aiming to become the region's shipping hub.

The involvement of such a large Chinese company appears to conform to a pattern by Beijing after it sealed a deal in January to acquire the Pakistani port of Gwadar at a time when it is also building a US$14 million "dry port" in the Nepalese city of Larcha, near Tibet.

Chinese loans and expertise were also instrumental in the construction of a new U$450 million deep-sea port at the southern Sri Lankan city of Hambantota which opened in June 2012.

Independent shipping expert, Rohan Masakorala, says the new terminal made economic sense for China to tap in to the growing South Asian container cargo and gave Beijing a foothold along a strategic sea route.

"Terminal investments are a good business which can give a very good return," said Masakorala, a former secretary general of the Singapore-based Asian Shippers' Council. "Through this investment, China is also securing the safety and efficiency of their main supply chain."