Lankan boat builders urge taxes on foreign vessel imports
The duty free access given to import foreign vessels and heavy taxes on imported parts has become a major impediment to the growth of the Sri Lankan boat building industry, a leading boat manufacturing company official, said.
Action taken by the government to impose taxes on imported boat parts has led to high production costs and local boat builders are finding it difficult to compete with low priced dilapidated second hand boats being imported to the country taking advantage of the zero tax concession granted during the tsunami period, Neil Fernando and Co (Pvt) Ltd Director Administration Kapila Sumanapala told the Business Times. Today the market is flooded with used and dilapidated boats imported to Sri Lanka. These boats are very cheap or carry no value in countries where they are disposed of due to long use or very poor condition that restricts the usage any further there.
Importers in Sri Lanka, apart from purchasing these cheap boats, escape any other charges as there is no duty for the importation of boats. This has severely affected the local industry, he said.
Mr. Sumanapala revealed that Neil Fernando and Company as one of the biggest Fibre Glass boat builders with the internationally known trade mark “Neil Marine”, has brought to the notice of Treasury Secretary Dr. P.B. Jayasundera on the need to impose import duty on foreign boats to protect the local industry. It has also conveyed the issues and the constraints faced by the boat building sector and provided suggestions as well, in order to improve their present global and local market share.
Presently there are no common areas allocated for slipping/hauling and berthing of boats and the builders go through business with immense hardship due to this reason.
It is a requirement to carry out trials with the customers on launching of the boats before handing over and delivery.
“There is no proper facility to launch a boat for trial purposes and no space is allocated for boat builders to carry out the required trials and launching facilities are far from any satisfactory level in Sri Lanka,” he said.
Mr. Sumanapala has suggested the government to identify and allocate a waterfront accessible to the sea for slipping/hauling and berthing of boats, which area should be free of other obstructing elements such as parking of fishing trawlers of the fishermen.
He disclosed that boat builders were seeking government support to promote investment in marinas for both local boat owners as well as foreign boats that call at Sri Lanka.
Modern facilities like marinas were essential to create a boating culture in the island and attract more people to own boats and enjoy the pleasures of sailing, he added. “Marinas, like airports, are an entry point to the country,” Mr. Sumanapala said adding that no one can develop the local boat industry without marinas and boat parks, like vehicle parks.
An up-market clientele could come in their own yachts/boats to Sri Lanka and have them anchored in well designed Marinas which could extend support services such as refueling, supply of food, ice and water, technical assistance, general upkeep of the boats, etc, during the time the boats are anchored.
Initially, the main tourist locations such as Negombo, Beruwela and Trincomalee could be taken in for this development and subsequently it could be extended to other areas like Galle, Hambantota, Batticaloa, Jaffna and Mannar, etc, he added.
Around 50 large, medium and small scale boat manufacturers are in operation and about 10 of them are exporting various boats to the Middle East, Seychelles, Mauritius, Maldives, Madagascar, Bangladesh and Pakistan.
Outlining the Neil Marine performances, Mr. Sumanapala said that in addition to catering to the local fishing and other market requirements in Sri Lanka, most of the company’s boats are exported to European countries such as the UK, France, Norway, Netherlands and other countries like Seychelles, Maldives, India, Pakistan, Tanzania, Madagascar and Thailand as well as to the Middle East, Mozambique, Gambia, and Djibouti.
It has a production capacity of 100 boats depending on sizes per month and the export turnover is US$3 million, he added.
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