Exclusive: Adani-Led Sri Lanka Container Terminal to Double Capacity Ahead of Schedule
India’s Adani Group and its partners are set to double the capacity of an $840 million container terminal in Colombo several months ahead of schedule, despite abandoning a planned $553 million U.S. investment, a senior executive at partner firm John Keells Holdings (JKH.CM) told Reuters.
The deepwater Colombo West International Terminal, located next to a facility operated by China Merchants Port Holdings (0144.HK), highlights Sri Lanka’s geopolitical significance in the tug-of-war for influence in the Indian Ocean between New Delhi and Beijing.
Adani inaugurated the first phase of the fully automated terminal in April, marking the start of operations. Zafeer Hashim, Head of Transport at John Keells, said the second and final phase is underway and expected to be completed by the end of 2026—three to four months ahead of the February 2027 deadline.
Given Sri Lanka’s deep financial crisis, which had nearly stalled foreign investment in the country, this accelerated timeline, previously unreported, was unexpected.
Hashim added that once the final phase is completed, the terminal’s capacity will reach 3.2 million containers annually, boosting the overall throughput of the Port of Colombo.
A significant portion of the terminal’s trade originates from India.
In December, Adani withdrew its financing request from the U.S. International Development Finance Corporation and opted to fund the project through internal sources and a capital management plan.
This decision came after U.S. authorities charged Adani Group Chairman Gautam Adani and others with alleged involvement in a bribery scheme—a claim the group has strongly denied as baseless.
Speaking from his office in a heritage building in central Colombo, Hashim said, “Working with Adani, we haven’t seen any reason for concern.”
“Unless something is proven otherwise, we remain partners and have no comment to make. It’s been a very good experience working with them.”
Adani Ports & Special Economic Zone (APSE.NS) holds a 51% stake in the terminal, John Keells owns 34%, and the remaining share is held by the Sri Lanka Ports Authority.
Energy Minister Kumara Jayakody told Reuters that Sri Lanka is exploring further investment opportunities from Adani in renewable energy, although earlier this year there had been some disagreements.
Adani did not respond to requests for comment.
In February, after Sri Lanka’s newly elected government under President Anura Kumara Dissanayake sought to renegotiate electricity purchase rates, Adani withdrew from two proposed $1 billion wind power projects.
These projects, approved without competitive bidding under the previous administration, faced scrutiny over environmental and transparency concerns.
Arjun Herath, Chairman of Sri Lanka’s Investment Board, said, “Adani pulled out because the government felt the tariffs they proposed were too high, and the government was open to negotiations.”
“But Adani believed they could not accept a lower tariff than what was proposed.”
Jayakody added that Adani later purchased bid documents for two smaller wind power projects totaling 100 MW, though they ultimately did not submit a bid. Still, he said, this indicated renewed interest.
Herath noted, “Just because Adani withdrew from that deal doesn’t mean we have any issues with them. Adani is performing very well in the West Terminal project, and we are very happy with their progress.”
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