China Merchants pulls out of $392m Sri Lanka port logistics venture
State-owned China Merchants Port Holdings has withdrawn from the $392 million South Asia Commercial and Logistics Hub at the Port of Colombo, with the Sri Lanka Ports Authority paying a $21.9 million settlement.
COLOMBO — State-owned China Merchants Port Holdings has withdrawn from a $392 million joint venture to build the South Asia Commercial and Logistics Hub (SACLH) at the Port of Colombo, the Sri Lanka Ports Authority (SLPA) announced on Monday.
“Following an assessment of the prevailing external circumstances, commercial considerations and the interests of the respective shareholders, a decision was reached not to proceed with the proposed joint venture,” the SLPA said in a statement, adding that it would pursue a “new logistics hub” under a public-private partnership model through competitive bidding.
China Merchants was to hold 70% of the venture through its subsidiary Fortune Centre Group Ltd, with the SLPA and Access Engineering PLC holding 15% each. The company confirmed the termination in a filing to the Hong Kong Stock Exchange on Thursday, 15 October, saying ending the project was “in the best interests of the parties.”
The 2023 pledge was touted as the first major foreign direct investment announced after Sri Lanka’s April 2022 economic collapse. The exit is the second big investor withdrawal after Adani Green abandoned a $442 million renewable project in February 2025.
Under the settlement, shareholders will recover about $29.8 million of the $37.1 million invested: the SLPA will pay $21.9 million to the project company within 30 days, with the rest distributed from remaining cash. China Merchants already operates a $500 million deep-water terminal at Colombo and manages the Hambantota port.
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