Severe structural and management failures at the Port of Colombo have left Sri Lanka’s flagship East Container Terminal largely non-operational more than a decade after its first phase was completed, delaying critical returns on a USD 755 million national project.
Senior Professor Prasanna Perera, former Vice Chairman of the Sri Lanka Ports Authority and Head of the Economics Department at the University of Peradeniya, disclosed the systemic lapses surrounding the asset during a detailed technical assessment.
Despite USD 550 million having been spent by early 2026, the facility remains unable to conduct full semi-automated operations due to fragmented procurement, incomplete integrated designs, and missing critical software interfaces.
Equipment sequencing failures have left all 40 Automated Rail-Mounted Gantry cranes and four Ship-to-Shore cranes standing idle, risking the expiry of warranties and software licences before commercial deployment.
The terminal civil works face ongoing delays under a fourth extension request through July 2026, compounded by pending legal claims, five cancelled straddle carrier tenders, and unresolved staffing approvals.
Revenue losses for 2026 alone are estimated between USD 28.2 million and USD 105.6 million, excluding loan interest, maintenance costs, and potential long-term cargo diversion to regional competitors such as Hambantota.
Governance conflict
Critical oversight deficiencies and frequent leadership turnover have further undermined project execution and financial accountability.
Professor Perera highlighted a fundamental conflict of interest in having internal authority engineers supervise construction and assess contractual claims resulting from the institution's own operational decisions.
Frequent management changes, featuring at least four chairpersons and multiple project directors since 2021, have continually disrupted continuity and institutional memory.
To resolve the impasse, the economist outlined a series of mandatory operational and administrative interventions.
- Appointment of an independent third-party engineer to supervise remaining civil works and objectively assess contractor claims.
- Formalisation of a final, unextendable completion deadline that fully accounts for seasonal monsoon risks.
- Immediate procurement of the Equipment Control Interface Database alongside parallel resolution of legal disputes.
- Resolution of the straddle carrier procurement based on an independent price evaluation to support interim operations.
- Approval of 467 pending operational posts by the Department of Management Services to ensure adequate staffing.
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