Mumbai: Billionaire Gautam Adani led Adani Ports and Special Economic Zones Ltd. (APSEZ), will work with Sri Lanka’s John Keells Holdings Plc to develop a port terminal in the island nation, strengthening India’s partnership with its neighbor, which has depended heavily on China for infrastructure development in recent years.
APSEZ, India’s largest private ports developers, will be the first Indian port operator in Sri Lanka, with a 51% stake in the joint venture, making it Gautam Adani’s first such standalone overseas project.
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APSEZ has received a Letter of Intent (LOI) from the Ministry of Ports and Shipping of Sri Lanka and the Sri Lanka Ports Authority for the development and operations of the West Container Terminal (WCT) in Colombo, Sri Lanka, APSEZ said in a regulatory filing to the exchanges.
Commenting on the deal, Karan Adani, CEO and Whole Time Director of APSEZ, said, “The combination of the strategic location of the Port of Colombo as a launching point for transshipment across the entire subcontinent, the deep domestic strength of SLPA and John Keells Holdings PLC, and the Adani Group’s unmatched network of container terminals across the Indian coastline opens up several dimensions of growth possibilities for years to come, not just within our two countries but also to the east as well as the west of our two nations.”
According to Daya Ratnayake, chairman of Sri Lanka Ports Authority (SLPA), the project cost is estimated to be around $750 million.
SLPA will also be part of the consortium, which will develop WCT on a Build, Operate and Transfer basis for a period of 35 years as a public-private partnership, said APSEZ in a statement.
The port will have a length of 1400 meters and a depth of 20 meters, thereby making it a prime transshipment cargo destination to handle Ultra Large Container Carriers.
Krishan Balendra, Chairman of JKH, said “We are excited about this opportunity to invest in the much-needed capacity expansion of the Colombo Port and to partner the Adani Group, the leading port operator in India.”
The Public-Private Partnership (PPP) development of the West Container Terminal would bring to bear the synergies, expertise, and experience of the Adani Group, the John Keells Group, and the Sri Lanka Ports Authority, which would ensure a world-class deep-water offering in the Port of Colombo, catering to the largest container ships afloat, according to Mr. Balendra.
APSEZ shares closed down marginally at Rs 717 in a weak Mumbai market on Tuesday, valuing the company at Rs 1,45,707 crore.
The project is expected to boost WCT’s container handling capacity and further consolidate Sri Lanka’s locational advantage as one of the world’s top strategic nodes along the busiest global transshipment route.
The Colombo Port is already the most preferred regional hub for transshipment of Indian containers and mainline ship operators, with 45% of Colombo’s transshipment volumes either originating from or destined to an Adani port terminal in India.
This partnership will multiply and accelerate the transshipment options available to serve various shipping lines and other potential port customers across the South Asian waters, benefiting both India and Sri Lanka in multiple ways, said the APZSEZ statement.
APSEZ operates a dozen ports in India and commands nearly a-third market share, making it India’s largest port developer, and recently got investment from Warbus Pincus LLC.
Off late, the first generation entrepreneur Gautam Adani is seen aggressively bidding to own infrastructure assets starting from ports, airports, coal mines, power, data centers, and renewables assets.
Gautam Adani has overtaken global billionaires like Jeff Bezos of Amazon, Tesla’s chief Elon Musk and India’s richest Mukesh Ambani in wealth creation this year.
With a fortune of over $50.4 billion, ranked 26th in Bloomberg’s billionaires’ list, Adani has added $16.6 billion to his wealth in 2021, more than the world’s richest Jeff Bezos, second richest Musk, or Asia’s richest Mukesh Ambani.