THE Asian Development Bank (ADB) is lending US$300 million to help finance the Colombo Port Expansion Project, Xinhua reports.

The project will be funded through a public-private collaboration, with the public sector undertaking infrastructure improvement works in the harbour, including dredging and breakwater construction to pave the way for three new container terminals.

The private sector will then develop and operate the container terminals which will be constructed in phases.

The expansion works are designed to raise the port's container handling capacity from 3.3 million TEU in 2006 to 5.7 million by 2010 and eventually to 10.5 million, according to the ADX, in a bid to turn Sri Lanka into a transshipment hub.

"Colombo Port is a natural transshipment hub for South Asia," said Prodyut Dutt, a senior transport specialist with ADB's South Asia Department. "In recent years, Colombo Port has lost market share in transshipment because it does not have the operating capacity or depth required to berth the latest generation containerships."