SLPA afloat on SAGT, CICT royalties
The Colombo port this week announced massive gains in operational profits in 2016 however without discounting the fact that 100 per cent of this came from royalties collected from the two privately-owned terminals.
The Sri Lanka Ports Authority (SLPA)-run Jaya Container Terminal (JCT) and the Unity Container Terminal (UCT) last year had made a net loss if not for the royalties obtained from the South Asia Gateway Terminal (SAGT) amounting to Rs.4.4 billion and the Colombo International Container Terminal (CICT) at Rs.5.7 billion, a Business Times analysis based on the SLPA’s own figures shows. At a news conference on Thursday, the SLPA said it had recorded a ‘net’ profit of Rs.11 billion last year.
Also revealing is that since Ports and Shipping Minister Arjuna Ranatunga had disclosed only the operational profit (profit before deducting taxes and interest) other market analysts note that when the interest payable and depreciation is taken then it would amount to a net loss.
Authorities detailed that 2016 revenue recorded by the Colombo Port amounted to Rs.44 billion with a majority of the ships calling at the CICT and as a result the total amounted to an increase of 5 per cent with transshipment volumes up by 11.8 per cent compared to the 2015. Transshipment accounts for over 70 per cent of the business generated at the Colombo Port. The minister told reporters that the SLPA had incurred a total cost of Rs.16.7 billion in loans and interest payments last year, including Rs.7.1 billion for the Hambantota Port.
The two private sector driven terminals at the Port of Colombo had contributed Rs.4.4 billion (SAGT) and Rs.5.7 billion (CICT) inclusive of royalty fees.
Meanwhile, Minister Ranatunga said that there was about a 70 per cent change in the draft agreement with the Chinese company selected to run the Hambantota Port.
He pointed out that they had sent their concerns to the Attorney General and explained that they were likely to finalise the agreement in a week or 10 days.
But he noted that due to a court case filed regarding the issue they were unable to have official level discussions with the relevant party as it was not “ethical.”
“We are working very hard to get what we want,” Minister Ranatunga said adding that currently they were awaiting the AG’s decision regarding the legislation that was subject to being changed as per the new agreement.
However, he noted that amending legislation could not be brought overnight and that this could take some time.