Fast tracking to be major maritime hub | Daily News

Fast tracking to be major maritime hub

Picture courtesy CDR International.
Picture courtesy CDR International.

Much of this success is attributed to the performance of Colombo Port. Ranking 24th on the Lloyds List in 2019, Colombo Port is a significant player in the region, acting as a major transhipment hub connecting to India and other countries.

The oceans, particularly maritime trade, have been the lifeblood of the modern global economy and Sri Lanka, with its close proximity to the main East West trade lane has immensely benefited due to the geographic location.

The Port of Colombo recorded a throughput of 7.2 million TEUs in 2019. However, the bitter truth is that Sri Lanka will have to be highly competitive and grow further if the country wants to maintain its supreme position as the most important trading hub in South Asia and it simply cannot only rely on the advantage of its geographic location. In other words we need to build capacity.

This was emphasized by President Gotabaya Rajapaksa when he discussed the future activities of the State Ministry of Warehouse Facilities, Container Yards, Port Supply Facilities and Boat and Ship Building Industry Development on Tuesday (September 15). He said that Sri Lanka can use its unique location advantage to become one of the world’s leading maritime hubs. Pointing out that goal could be achieved speedily by developing our ports facilities by emulating the world’s most advanced ports, he emphasized the need to develop our ports to a higher level that would make them capable of attracting world’s largest cargo ships each with a capacity of 24,000 containers.

To enhance our port capacity, the development of the Eastern and Western Terminals of Colombo Port should be accelerated. The President further said that the port system should be developed to cater to the needs of international vessels plying close to the country and in parallel to these initiatives Ports in Colombo, Galle, Trincomalee, Kankesanthurai and Oluvil should be developed.

During the discussion, a special attention was paid to upgrade the reshipment handling capacity, offering warehouse facilities and container terminals as well as supply facilities of international standards. It was also discussed to construct new warehouse facilities in areas such as Ratmalana, Peliyagoda and Veyangoda to promote Colombo Port as a premier transshipment hub.

The government should intervene to construct fuel storage tanks and supply fuel to the vessels. The President authorized the construction of a docking bay in Beruwala to facilitate the launch of large boats into the sea. “It is necessary to expand manufacturing, repairs and maintenance of ships and boats aiming the global market. The expansion of facilities to exchange naval staff centering main ports is also important’, President emphasized.

Sri Lanka is strategically located in the centre of the Indian Ocean, roughly 10 nautical miles off the traditional East-West maritime trade route. The region sees some 60,000 ships passing through annually. A recent survey revealed that in 2018, Sri Lanka accounted for 24% of container traffic in the South Asian region and typically grew faster than the regional average. Much of this success is attributed to the performance of Colombo Port. Ranking 24th on the Lloyds List in 2019, Colombo Port is a significant player in the region, acting as a major transhipment hub connecting to India and other countries.

All the experts were of the view that in order to mitigate port capacity constraints at Colombo Port, planned port developments including the delayed East Terminal project should be speeded up. A recent research publication stated that private sector-oriented solution like forming a public-private-partnership, through a competitive tendering basis with a multilateral development bank playing an honest broker role could be one way to approach this issue. Whatever solution is ultimately adopted, the best possible financial terms for Sri Lanka should be ensured as Colombo Port is a strategic national asset while considering the sensitivities of the neighbourhood.

The research paper said that seen in purely commercial terms, Sri Lanka’s transhipment trade is heavily dependent on the Indian market and such trade seems at risk. Geopolitical concerns in Indian policy circles have prompted investment to upgrade major Indian ports through the Sagarmala Initiative and a planned transhipment port in the Andaman and Nicobar Islands.

The Eastern Terminal of the Colombo Port was inactive for five years since 2015 due to the mismanagement and poor decision making, Ports and Shipping Minister Rohitha Abeygunawardena said. “When we handed over the Eastern Terminal, all its work was completed. As soon as the Government changed, it decided to cancel the order for importing cranes for this terminal. Due to this poor decision, the Eastern Terminal ended up being inactive due to the lack of cranes during the last four and a half years. This is a humongous terminal that could facilitate any large international vessel,” he noted.

Last week, Ceylon Association of Shipping Agents (CASA) has warned Colombo’s status as a maritime hub is under threat by the failure to expedite capacity expansion, ease of business as well as major port development moves to by neighbouring India. “The Port of Colombo, with its close proximity to the main East West trade lane has benefited due to our geographic location. The Port of Colombo recorded a throughput of 7.2 million TEUS in 2019. If we are to remain competitive and grow further we just cannot only rely on our geographic location. We need to build capacity,” CASA Chairman Iqram Cuttilan said.