Hutchison Port Holdings (HPH)'s bid to build and operate the new $1.2 billion container terminal at Sri Lanka's port of Colombo has hit an obstacle.

Reports say that local conglomerate Aitken Spence Shipping Ltd. has filed a case against the Sri Lanka Port Authority, alleging that Hutchison is ineligible to bid because it has been subject to anti-competitive litigation involving its subsidiaries in Indonesian ports.

Aitken Spence maintains that bidding requirements have been violated due to Hutchison's current legal liabilities.

In ignoring the issue, the government tender board has been accused of exceeding its legal authority in evaluating the offer.

All of Sri Lanka's top conglomerates have submitted bids for the highly anticipated project.

Bidding to build and operate the new container facilities has also sparked interest from major global operators.

Sri Lanka's Ministry of Ports and Aviation had in June called for Expression of Interests (EOI) to build and operate a terminal as part of the South Harbour project for Colombo port.

The bid calls for a three-berth terminal to handle around 2.4 million twenty-foot equivalent units (TEUs) per year.  Construction costs have been estimated at more than $500 million.

Current operator of the Queen Elizabeth Quay in Colombo port, John Keells Holdings PLC-South Asia Gateway Terminals (JKH-SAGT) has formed a partnership with Pembinan Ridzai Berhad, the owners of Westports Malaysia Sdn Bhd to submit a bid.

Another consortium bid sees financial giants Hayleys Limited and holdings company Carson Cumberbatch & Company Limited linking up with French shipper CMA CGM Group's port arm Terminal Link.

Singapore's PSA International Pte. Ltd. also made a bid, partnering logistics conglomerate Aitken Spence Shipping Ltd.

The other two bids came from Hong Kong's Hutchison Port Holdings (HPH) and Hanjin Shipping with its local agents Navigation Maritime.

The South Harbour project is the government's plan to revitalize the port of Colombo.  Government officials have directly linked Colombo port's performance with the country's economic growth.