Colombo Port expansion delays could weaken Sri Lanka’s transshipment role as India’s Vizhinjam Port attracts investment and capacity.
Delays affecting Colombo Port expansion could weaken Sri Lanka’s position as a regional transshipment hub while competing Indian ports rapidly increase their capacity.
A parliamentary oversight committee raised the warning during a review of the Sri Lanka Ports Authority’s operations, finances and ongoing development programmes.
The Sectoral Oversight Committee on Infrastructure and Strategic Development examined the competitive pressures facing Colombo as India accelerates work on Vizhinjam International Seaport.
Other regional ports are also expanding capacity and seeking to attract major international shipping lines.
Vizhinjam, located in Kerala, is being developed as a deep-water transshipment hub serving key international maritime routes.
The port has a natural draft of 24 metres. Its facilities can accommodate ultra-large container vessels and help India reduce its reliance on overseas transshipment ports.
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Colombo Port expansion faces regional pressure
Transshipment cargo remains the backbone of Colombo Port’s operations. It also generates substantial maritime revenue, employment and foreign exchange for Sri Lanka.
Approximately 84.5% of Colombo’s container throughput consists of transshipment cargo. A significant portion of that business connects directly to Indian trade.
Therefore, any diversion of containers to ports along the Indian coastline could damage Colombo’s regional position.
Such a shift could reduce port revenue, weaken demand for logistics services and affect the wider Sri Lankan economy.
During the review, committee members questioned SLPA officials about the threat posed by Vizhinjam’s expansion.
They also discussed Mediterranean Shipping Company’s investment in the Indian transshipment hub and plans to expand handling capacity at Hambantota Port.
The committee questioned the progress of projects designed to increase Colombo’s container-handling capacity.
Members highlighted implementation delays, procurement obstacles and the potential financial consequences for the Government.
They warned that continued delays could undermine Sri Lanka’s competitiveness while neighbouring countries modernise port infrastructure and attract shipping companies.
Committee demands audit into project delays
The committee called for a comprehensive audit to identify why key development projects had fallen behind schedule.
It also requested an examination of responsibility for those delays.
Members urged authorities to strengthen procurement procedures and improve project management to prevent similar setbacks.
The committee reviewed the SLPA’s financial performance during the first six months of 2026. It also considered measures needed to maintain the authority’s profitability.
However, officials disclosed no financial figures during the meeting.
Discussions also covered recommendations previously issued by the committee and matters identified in the SLPA’s 2024 Annual Report.
Members examined development programmes at Hambantota, Galle and Kankesanthurai ports.
They stressed the need to strengthen supporting infrastructure around regional ports. The committee also called for greater involvement from Sri Lankan contractors, consultants and technical professionals.
At the meeting’s conclusion, members urged authorities to accelerate strategic port projects.
They also called for stronger institutional accountability and greater transparency to improve SLPA efficiency and long-term profitability.
Capacity target reaches 15 million TEUs
Samagi Jana Balawegaya MP S.M. Marikkar chaired the meeting.
MPs Ajith P. Perera, Manjula Suraweera Arachchi, Chathura Galappaththi, Ravindra Bandara, Dhanushka Ranganath and Shantha Padma Kumara also attended.
The Ports and Civil Aviation Ministry Secretary, SLPA Chairman, Managing Director and other officials were present.
The Port of Colombo is expected to double its container-handling capacity to 15 million Twenty-Foot Equivalent Units by the end of 2026.
However, the Central Bank of Sri Lanka has warned that geography alone may no longer protect Colombo’s position as South Asia’s leading transshipment centre.
Regional rivals continue to expand through major investments, policy reforms and agreements with international shipping companies.
“Mere reliance on geographical advantage may no longer be sufficient for Sri Lankan ports in maintaining their position as a leading transshipment hub in the region,” the CBSL stated in its latest infrastructure report.
The warning adds urgency to Colombo Port expansion, as Sri Lanka attempts to protect a maritime industry closely linked to Indian cargo and regional trade.
