Sri Lanka is trying to enhance its ship building capacity with the government inviting foreign investors to set up a ship yard at a new port being built in the south, a senior port official said.

The Sri Lanka Ports Authority (SLPA) is set to issue a request for proposals by the end of the first quarter of this year to attract investments to the new port in Hambantota, being built with Chinese support, SLPA chairman Priyath Wickrema said.

"We’re holding discussions with companies from Dubai, India and China to establish a dockyard in Hambantota."

Dubai and China have emerged as big ship builders, challenging the dominance of Japanese and South Korean yards, he said.

The plan for Hambantota envisages allocating plenty of space for a new ship yard, he added.

The envisaged facility will be big enough to build vessels of up to 450 metres in length, he said.

By contrast Colombo port, where Colombo Dockyard, the island’s sole listed ship builder, has its facility, is congested with no room for expansion.

Two Chinese companies are building the new port in Hambantota and construction work is ahead of schedule, Wickrema said.

Hambantota was chosen as the site for a new port because of its proximity to the main shipping route.

Initially, the port will serve as a bunkering port, and then expanded to handle conventional cargo that will be diverted from Colombo.