SAGT’s future beyond 2029 awaits government decision as Colombo expands capacity

John Keells Holdings (JKH) is awaiting Sri Lankan government guidance on the future of South Asia Gateway Terminals (SAGT) after its concession expires in 2029. Chairperson and Chief Executive Officer Krishan Balendra told a recent investor webinar that returning the terminal to the government, conducting a fresh tender or extending the existing concession remained possible outcomes.

The 30-year build-operate-transfer concession, signed in 1999, is expected to end around August or September 2029. No decision on the subsequent operating arrangement has been communicated to JKH.

What is JKH seeking for SAGT?

JKH has previously expressed interest in continuing its involvement. During its fourth-quarter FY2025–26 investor webinar, management said it was engaging with the government and would seek an extension if given the opportunity. Those discussions had not established a way forward.

The latest comments indicate that the concession’s future remains unresolved as the expiry date approaches.

SAGT began operations at Queen Elizabeth Quay in 1999 as Sri Lanka’s first public-private partnership container terminal. Its shareholders include JKH, APM Terminals, the Sri Lanka Ports Authority and an Evergreen Marine group investment company. The terminal’s establishment brought private-sector participation into Colombo’s container-handling operations.

How are volumes changing across JKH’s terminals?

The concession discussion comes amid contrasting performances at JKH’s two Colombo terminal investments.

SAGT handled 425,882 twenty-foot equivalent units (TEUs) in the quarter ended 30 September 2026, down 18.6% from 523,108 TEUs a year earlier. Colombo West International Terminal (CWIT), in which JKH holds 34%, handled 502,351 TEUs, an increase of 90.9%.

JKH Deputy Chairperson and Group Finance Director Gihan Cooray attributed SAGT’s recent weakness to vessel movements disrupted by the Middle East conflict. He said activity had recovered in October. Management also highlighted congestion caused by transhipment containers remaining in Colombo’s constrained yard space.

JKH’s quarterly filing confirmed that CWIT was operating beyond full utilisation of its first-phase capacity. It also reported that the terminal had reached cumulative throughput of two million TEUs within 18 months of commencing operations.

What additional capacity is CWIT bringing?

CWIT’s second phase increases annual handling capacity from 1.6 million to 3.2 million TEUs. Adani Ports and Special Economic Zone announced the expansion’s inauguration at the end of September, identifying total investment in the terminal at US$750 million.

The expanded terminal is intended to handle nearly one-quarter of Colombo Port’s targeted annual capacity of 13 million TEUs by 2028. That figure represents a capacity objective, rather than current cargo throughput.

JKH’s November results update distinguished the inauguration from full operational deployment. Phase-two operations had begun, with equipment being commissioned progressively, while full operations remained scheduled for December 2026.

The additional contribution from CWIT, together with stronger bunkering activity, supported JKH’s transportation business. The segment recorded earnings before interest, tax, depreciation and amortisation of approximately LKR4.89 billion in the September quarter, up 153% year on year.

How do the two terminal concessions differ?

CWIT operates under a separate 35-year build-operate-transfer agreement. Its consortium comprises Adani Ports, JKH and the Sri Lanka Ports Authority. Adani holds 51%, JKH 34% and the authority 15%.

SAGT’s approaching expiry therefore presents a distinct decision on the operation of an established terminal, while CWIT continues its capacity ramp-up. JKH’s stated interest in extending SAGT’s concession remains subject to government policy and the process selected by the authorities.