Sri Lanka’s Minister of Ports and Civil Aviation, Anura Karunathilaka, has confirmed that the project has reached the final stage of negotiations, dismissing concerns over delays and stating that there are no impediments to its implementation.
According to the Minister, the project will be funded entirely through grant assistance from India, following the conversion of the original line of credit into a full grant. This means Sri Lanka will not be required to repay the funding as a loan.
India’s High Commission has also listed $65 million in grant assistance for the KKS Port development in its bilateral relations update, although the Memorandum of Understanding (MoU) formalising the arrangement is still under negotiation.
Karunathilaka said that the delay was primarily due to the need to finalise the terms of the MoU after consultations involving several Sri Lankan government agencies, including the Ministries of Defence and Foreign Affairs, the Legal Draftsman’s Department and other stakeholders.
The proposed arrangement envisages a 50:50 partnership, with an operating period of 25 years. However, the Minister indicated that the duration and other terms could be subject to changes before the agreement is finalised.
India had previously provided funding under the original credit line towards preliminary studies and technical designs. The Minister recalled that approximately $2 million had been disbursed for these activities, although he did not specify the exact amount.
Project Delayed Since 2020
The KKS Port rehabilitation project has faced prolonged delays despite efforts to advance its development. An agreement was signed between Sri Lanka and the Export-Import Bank of India on 10 January 2018 for a $45.27 million credit facility to renovate the port. However, the project could not proceed as originally planned, prompting the Sri Lankan Government to seek grant assistance from India to meet the revised development requirements.
According to the National Audit Office’s 2024 audit report, preliminary designs, prequalification documents and the detailed project report had been completed. A sum of Rs.196.3 million had also been paid to consultants, but construction had not commenced by the end of 2024.
In February 2026, Karunathilaka inspected the port and directed officials from the Ministry and the Sri Lanka Ports Authority (SLPA) to expedite the necessary arrangements to commence the project.
India-Sri Lanka Discussions to Finalise MoU
Further discussions were held on 3 September 2026 at the Ministry of Energy, Ports and Civil Aviation in Colombo to resolve outstanding issues relating to the proposed MoU.
The meeting was attended by Indian Deputy High Commissioner Maitrey Kulkarni, Sri Lankan Deputy Minister of Ports and Civil Aviation Janitha Ruwan Kodithuwakku, Ministry Secretary W.W.S. Mangala, the SLPA Chairman and officials from the Ministry of Foreign Affairs.
Both sides reached agreement on several outstanding matters, with the Indian delegation agreeing to convey the progress to New Delhi and seek a final decision. Proposals were also made to establish a joint steering committee and a technical committee to oversee the project.
With negotiations now nearing completion, the proposed Indian-funded development is expected to provide a significant boost to port infrastructure in northern Sri Lanka and strengthen maritime and economic connectivity between India and Sri Lanka.