SLPA strategises for port growth
Sri Lanka’s Colombo port is preparing a series of growth strategies with expectations high on the increase in container throughput by the end of this year by 7.5 per cent compared to the previous year resulting in 6 million TEUs from the three key terminals.
File picture of work at the Colombo Port city which adjoins the Colombo harbour
Colombo Port will handle six million containers with a growth of 7.5 per cent as against last year, Sri Lanka Ports Authority (SLPA) Chairman Dr. Parakrama Dissanayake said at an interview with the Business Times on Tuesday.
He noted that the Colombo International Container Terminal (CICT) would attract a larger volume due to its deep draft advantage and the South Asia Gateway Terminal (SAGT) likely to bring in lower containers compared to the other two terminals.
Meanwhile, the SLPA run Jaya Container Terminal (JCT) will continue to be a market leader handling a sizeable volume of approximately 35 per cent of the total throughput.
JCT plans
One of the growth strategies adopted by the SLPA to turnaround the JCT would be to put into action plans to modernise the terminal with an investment of US$60 million, Dr. Dissanayake said. JCT has a draft of 14.5 metres.
He noted that they would be extending the quay length by 120 metres and procurement of three ship-to-shore gantry cranes that would enable the terminal to handle simultaneously two 330 metre length ships.
The procurement process has already commenced and they would be seeking two contractors to commission the work, it was noted.
Berth occupancy at the JCT would go up to 65-70 per cent from the existing 50 per cent, Dr. Dissanayake explained.
East Container Terminal plans
The Chairman also explained that currently they were “trying to fast-track the development of the East Container Terminal” since the Colombo South Harbour was getting congested on certain days due to the non availability of a deep draft facility apart from the CICT.
President Maithripala Sirisena had stated earlier this year that the ECT would in future be managed by the SLPA and it is learnt that Ports and Shipping Minister Mahinda Samarasinghe would be taking a decision on the Request for Proposal (RFP) that was floated for the ECT within the next two months.
Industry sources said that the minister was likely to arrive at a decision on the RFPs within the next two months and it was pointed out that the under the first phase of the ECT plans there would be an investment of $70 million made by the SLPA.
This investment would be used for the procurement of a container handling equipment within the next two months while the jetty at the terminal is already in place.
Moreover, it is understood that under the first phase plans the ECT would be equipped to handle ultra large containers (ULCs).
A second phase of the ECT would incur an additional investment of $300 million that would witness the quay length of the terminal extended by a further 600 metres. In addition there would be a further procurement of gantry cranes, it is learnt.
Regulator for the ports
The government will be drawing up new legislation on the establishment of an independent regulator functioning under the Ports and Shipping Ministry.
The need for an independent regulator was believed to be relevant in time to come when the Hambantota port would be up and running at least four decades down the line when competition would intensify within the country’s own ports.
The independent regulator would be tasked with ensuring level playing fields between the ports, it is learnt.
The call for a regulator has been set out in the Hambantota Port concession agreement between the Sri Lankan Government and the China Merchant Port Holdings (CMPH) that enables the minister to appoint an independent regulator.
It is learnt that Cabinet had granted approval for the Minister to establish an independent port regulator and in line with this to draft new legislation that would ensure the entity would be state-run and established outside of the SLPA.
“The” Concession agreement
Signing the Hambantota port deal in the concession agreement with the CMPH, Dr. Dissanayake pointed out that the concession agreement is “the” agreement that concluded on July 29.
Both parties are given six months time to fulfill the conditions precedence and with just two months having lapsed it was noted that the government and the Chinese partner were involved in achieving certain procedures that needed to be met with.
In this respect, the two parties were “very much” on track to achieving the conditions required within the six month time frame and it was likely that they would be able to complete it prior to the conclusion of this time frame as well.
A port in the East
As the second largest natural harbour in the world, the government has plans to develop the much over-looked Trincomalee port.
Dr. Dissanayake said that the Expressions of Interest (EOI) would be released within a month calling for interest from various parties for the development of the port.
Interest would be solely for port related businesses to establish themselves for the conduct of operations of the Trincomalee port, it was noted.
The SLPA Chairman pointed out that any investment into the Trincomalee port would be solely based on demand driven factors.
In the meantime, authorities were also trying to extend the existing 250 metre length Ashroff quay following a feasibility study.
The Trincomlee port has a water and land area that is said to be 10 times as much as the Colombo port and was tentatively said to be identified to cater for bulk and break bulk cargo and port related industrial activities including heavy industries, tourism and agriculture among other sectors.
Colombo port marketing plan
Minister Samarasinghe is expected to announce the new formal arrangement next month on the action plan to ensure that the three terminals would work in collaboration with each other.
The three container terminals at the Colombo port would in future work in co-operative competition between them.
This would be carried out with the aim of ensuring that ships calling at the Colombo port would not be compelled to wait outside, it was explained.
In the meantime, the Galle port would be calling for RFPs for the Marine Yacht facility that would include a ship repair and small ship building facility.
Dr. Dissanayake noted that they were looking at creating a new business of small ship building and attracting more interest to this Southern port through these ventures.
Commenting on Sri Lanka’s competition in the wake of India’s growing southern ports, the SLPA Chairman said that “basically the challenge is to ensure we retain our advantage” but this would not mean that they should sit on this advantage without creating the required competitiveness.
Gone are the days, he said when Sri Lanka could lay claim to its best location on the shipping lanes as this would mean then that the Hambantota port by now should be attracting a large number of vessels. This clearly shows that the positioning of Sri Lanka on the world map was no longer to its own advantage as a result the island should be creating the required competitive edge.