Sri Lanka: Hambantota Port Says Focused on Fast Cargo Clearance Amid Reports of Vehicle Backlog

Hambantota International Port, which Sri Lanka leased to China, said it remains focused on maintaining its position as a regional roll-on/roll-off transhipment hub by ensuring rapid cargo clearance and minimising storage time, amid reports of a backlog of imported vehicles at the port.

The Hambantota International Port Group (HIPG), which manages the mega transit hub, issued the clarification on Monday after media reports claimed that more than 1,000 imported vehicles were lying uncleared due to importers' inability to complete documentation and pay port-related charges.

"Ports are designed to facilitate cargo movement, not to serve as long-term vehicle storage yards. Every vehicle that remains in the port for months or years occupies valuable operational space required to handle new cargo and support the continued growth of Sri Lanka's automotive logistics sector,” HIPG said in a press release.

The company said it remains focused on maintaining the facility as a regional roll-on/roll-off (RoRo) transhipment hub by ensuring rapid cargo clearance and minimising storage time.

A RoRo transhipment hub is a specialised port facility where wheeled cargo and vehicles are unloaded from one vessel, temporarily sorted or stored, and reloaded onto another vessel or transport mode without using cranes.

HIPG said it is currently handling more than 50,000 vehicles, including transhipment cargo and vehicles imported for the domestic market.

While media reports claimed that over 1,000 imported vehicles remain uncleared at the port in addition to 40,000 vehicles meant for transhipment, the company said only 1,278 vehicles have been at the port for more than three months and 581 for over a year.

According to the company, all the long-stay vehicles belong to the domestic import sector, and the delays are largely linked to Sri Lanka's vehicle import restrictions imposed during the COVID-19 pandemic. The island nation lifted the ban and resumed vehicle imports in 2025 after nearly five years.

Of the vehicles stored for more than a year, around 400 were imported before vehicle imports resumed in 2025, while another 175 date back to the period before the import ban was imposed, it said.

The company added that 178 vehicles have remained at the port since before HIPG took over management of Hambantota Port in December 2017.

HIPG is a public-private partnership between the Sri Lanka Ports Authority and China Merchants Port Holdings, with the Chinese company holding an 85 per cent stake.

The company attributed the prolonged storage to documentation issues, banking procedures, financing arrangements and other administrative delays beyond the port's control, asserting that such delays reduce the operational space needed to accommodate increasing automotive cargo volumes.

Under the current policy, imported vehicles are entitled to 10 days of free storage before charges are levied, while transhipment cargo receives 21 days of free storage. HIPG said customers were previously allowed only three days of free storage before it assumed management of the port.

HIPG said it granted significant "demurrage waivers and concessions for thousands of vehicles that remained at the port for extended periods", irrespective of whether they were subsequently re-exported or cleared into the domestic market.

Hambantota Port occupies a strategic position along one of the world's busiest east-west shipping lanes in the Indian Ocean.

Built largely with Chinese loans, the port became the focus of international attention in 2017 when Sri Lanka, struggling with mounting external debt and unable to service the borrowings, leased it to state-run China Merchants Port Holdings for 99 years in exchange for about USD 1.12 billion.

The transaction has frequently been cited by critics, including India and the US, as an example of China's alleged "debt-trap diplomacy", a characterisation Beijing has consistently rejected.