Colombo Logistics Hub Project Ends as CMPort Agrees to Exit

Summary

China Merchants Port Holdings has agreed to terminate its involvement in a planned US$392 million logistics complex at Sri Lanka’s Colombo Port. The settlement provides for repayment of project-related funds and the winding up of the joint venture, ending a development launched in 2023.

Agreement brings development to a close

The Colombo logistics hub project will not proceed under its existing arrangements after China Merchants Port Holdings, its partners and the Sri Lanka Ports Authority agreed to terminate the development.

Announced on 15 October 2026, the decision covers the South Asia Commercial and Logistics Hub, a proposed commercial logistics complex within the Port of Colombo. The termination arrangements cover the shareholders’ agreement, build-operate-transfer agreement and site lease, alongside the orderly closure of the project company.

Changes in external circumstances, the implementation environment and the timetable, together with the parties’ commercial considerations, were cited as reasons for ending the venture. The announcement does not establish a single political or geopolitical cause for the decision.

Settlement separates planned investment from money committed.

Under the settlement, the Sri Lanka Ports Authority will pay US$21.905 million to the project company, South Asia Commercial and Logistics Hub, within 30 days of the settlement agreement.

That payment is to be distributed among the shareholders according to their ownership interests. It is therefore a payment to the joint venture for subsequent distribution, rather than a sum payable entirely to China Merchants.

The settlement calculation starts with US$26 million and deducts US$3.9 million in value-added tax and US$195,000 in late-payment charges.

Separately, the project company held approximately US$7.85 million in distributable cash as at 31 December 2025. That balance is also covered by arrangements for distribution to shareholders.

These amounts must be distinguished from the widely reported US$392 million project value. That figure represented the proposed development’s investment cost; it was neither the amount already spent nor the compensation agreed for termination.

Consortium had planned a major logistics complex

China Merchants participated through its wholly owned subsidiary, Fortune Centre Group Limited, which held 70% of the project company. Sri Lanka’s Access Engineering and the Sri Lanka Ports Authority each held 15%.

The ownership structure combined an international port investor, a local engineering company and the public authority responsible for the port. The joint venture was established to finance, design, construct, develop, operate and maintain the facility under a public-private partnership.

Its responsibilities extended beyond construction to the long-term management of the proposed logistics operation. Terminating the agreements consequently ends both the development arrangements and the operating framework envisaged for the consortium.

The consortium launched the project in April 2023, presenting it as a major addition to Colombo’s commercial logistics infrastructure. At that stage, the development was promoted as South Asia’s largest commercial logistics complex, with a planned investment of US$392 million.

The proposed concession ran for 50 years under a build-operate-transfer model. Its cancellation closes that particular long-term development arrangement; it does not by itself determine what infrastructure will eventually occupy the site.

Commercial implications centre on the unrealised facility

For Colombo’s logistics sector, the immediate consequence is that the proposed complex will not be delivered by the original consortium under the agreed structure.

Commercially, this removes a planned source of additional logistics infrastructure from the current development pipeline. Businesses evaluating future capacity should therefore distinguish the cancelled proposal from facilities already operating at the port.

The financial settlement also provides a route for closing the venture’s outstanding obligations. Repayment, distribution of available funds and deregistration are separate steps from identifying a replacement development.

The termination should not be interpreted as confirmation that China Merchants is withdrawing from every Sri Lankan port investment. The agreements being ended concern this logistics hub and its project company.

Future development requires a fresh arrangement

Reporting on the cancellation indicates that fresh proposals are expected for the logistics development. However, that does not establish that a replacement investor has been selected, financing secured or a new construction timetable agreed.

Any successor proposal would need its own commercial structure, approvals and implementation commitments. Until those are announced, the confirmed development is the termination and settlement of the original venture, rather than the launch of a replacement project.

FAQs

What was the Colombo logistics hub project?

It was a proposed US$392 million commercial logistics complex at Colombo Port, launched by a consortium in April 2023.

Who owned the project company?

Fortune Centre Group held 70%, while Access Engineering and the Sri Lanka Ports Authority each held 15%.

How much will the port authority repay?

The settlement provides for US$21.905 million to be paid to the project company for distribution among shareholders.

Was US$392 million already invested?

That figure was the proposed development cost. It should not be treated as actual expenditure or the termination payment.

Has a replacement developer been appointed?

The available information does not confirm an appointed replacement developer or a new construction schedule.