Adani-JKH Container Terminal Gets 25-Year Tax Holiday

• The project will be 30 percent financed by equity and 70 percent by debt, which will be a foreign loan• Will have a 35-year build-operate-transfer concession from SLPA• Imported material will be free from VAT, import duty, Port and Airport Development Levy• Up to 20 expatriate employees will get tax exemption on salaries

Under the Strategic Development Projects Act, the government has granted a 25-year tax holiday for the proposed West Container Terminal (WCT) at the Port of Colombo to be built by India’s Adani group with its local partner, John Keells Holdings PLC (JKH) at an estimated cost of US$ 650 million on a build-operate-transfer (BOT) basis. Prime Minister, Mahinda Rajapaksa in his capacity as the Minister of Economic Policies and Plan Implementation on 30th of July this year declared WCT as a Strategic Development Project by issuing a government notification.

“…. Development and Operation of West Container Terminal- I (hereinafter referred to as “WCT-I”) project under the Colombo Port Expansion project with an envisaged investment of US$ 650 million with the aim of consolidating Colombo Port’s position as a transshipment hub for the South Asian Region by providing sufficient container handling capacity and adequate depth for the new-generation vessel,” the notification said.

The envisaged investment of the project is to be financed on a debt to equity ratio of 70:30, and the entire portion of debt is expected to be financed by a foreign loan, according to the notification. JKH recently revealed that it estimates to make an investment of US$ 70-80 million in the project.