The agreement was signed on 17 September 2014. Li Jianhong, the president of China Merchants Group, stated:
The agreement is another milestone for CMHI in further expanding its investment in Sri Lanka, following its successful commencement of operations at the Colombo South Container Terminal.
The teams plans to invest US$391 million for a majority stake in the port. China JV, the joint venture of CMHI and CHEC, will take a 64.98% stake in the project. Sri Lanka Ports Authority will provide civil engineering works and equipment and it will hold the remaining 35.02% stake, worth about US$210 million.
The total project investment is estimated at US$601 million. It involves the development of four container berths to bring the port's capacity to 2 million TEUs per year.
The concession period is 35 years, with the option of extending the contract for a further five years plus an extension option of 5 years.
The port is located on the south-eastern coast of Sri Lanka, only ten knots away from the Asia-Europe trade route, which is one of the world's busiest trade routes. China is Sri Lanka's largest lender, up to last year providing more than US$6 billion for port facilities and others transport infrastructure.