The Hon. Bimal Rathnayake - Minister of Transport, Highways, Ports and Civil Aviation and Leader of the House of Parliament

¶ 01 Hon. Speaker, I am responding to the Question raised under Standing Order 27(2) by Hon. S. S. Sreedharan on 23 July 2025. I have answered this matter on several previous occasions as it has been raised in different forms, but I will respond again.

¶ 02 1. With Indian Government assistance, the Indian company RITES prepared a preliminary estimate in 2016 for renovating Kankesanthurai Port at USD 45.27 million. Based on that, an Indian Exim Bank loan was arranged and a Project Management Consultant selected in 2020 prepared a Detailed Project Report (DPR) in 2021 revising the estimate to USD 61.5 million—an increase of USD 16.23 million. As additional Indian loan funds were not agreed to, the project was delayed. However, the Sri Lanka Ports Authority (SLPA) implemented the following with its own funds: - 2020: Repair of cyclone “Burevi” damages to the Kankesanthurai channel. - 2020: Construction of entry gate complex, port perimeter wall and security fencing. - 2021–2022: Completion of detailed designs for the KKS Port Rehabilitation Project. - 2022: Provision of pipe-borne water and electricity to the Port. - 2023: Completion of the passenger terminal.

¶ 03 2. In 2024, SLPA also constructed a warehouse and a weighbridge at KKS. SLPA is proceeding with rehabilitation of the breakwater and enhancing the passenger terminal and facilities. The existing rail track from Kankesanthurai Station via the CPSTL storage up to the Port is about 2.3 km; we are extending it to the Port using Government funds.

¶ 04 RITES earlier prepared DPRs/estimates in 2011, 2012 and 2016. In 2018, India’s Exim Bank extended USD 45.27 million for the project, subject to the 2011 MoU condition that at least 75% of goods and services be sourced from India. While RITES considered this in its estimate, logistics costs were not factored. Hence the 2021 DPR increased to USD 61.5 million. Cabinet approved on 03.01.2022 raising the extra funds from local banks, but due to market conditions it failed; in 2022 we requested the additional funds under the Indian loan. There has been no positive response yet.

¶ 05 Considering the importance of KKS, in Dec. 2023 we sought Cabinet approval to invite private sector participation. In Jan. 2024, following Treasury/Foreign Resources Department communications, the Indian High Commission informed in March 2024 that India is willing to provide the full USD 61.5 million and shared an MoU draft. Upon review, clauses 3.1, 6.1 and 8.1 (among others) were found potentially adverse to Sri Lanka; we are negotiating amendments with India. Once finalized, we can execute and proceed.

¶ 06 3. The Environmental Impact Assessment (Lanka Hydraulic Institute) was completed in August 2018.

¶ 07 4. Subject to concluding the amended MoU with India, procurement and construction are estimated to take about three years, considering local environmental conditions.

¶ 08 Passenger ferry operations at KKS have been seasonal due to sea conditions; details have been placed in the Library.