Corrupt state sector key impediment to maritime hub
Corruption happens when there are givers and takers and if the giving stops so would the taking, a top state official said calling on the shipping industry to collectively curb the practice of bribing officials at the Colombo port.
Sri Lanka Ports Authority (SLPA) Managing Director S. Premachandra said, “If there is a giver there will always be a taker” and in this respect, asserted, “As an industry, let’s get together and stop paying.” He made these observations during the panel discussion held at the conclusion of the seminar on Maritime Hub Aspirations of Sri Lanka organized by the Ceylon Association of Ships Agents (CASA) at the Galadari Hotel on Tuesday.
He explained that there is a need for greater transparency and pointed out that a hub status could be achieved in the absence of corruption.
“If you’re uncorrupt have you a place in this country?” he queried adding that “if you want to eliminate corruption you get eliminated first”.
In this context he wanted the entire shipping industry to make a concerted effort and take action by stop paying to corrupt state officials to get their work carried out at the Customs and Port related institutions.
Mr. Premachandra pointed out how some firms were adamant that they would not engage in paying corrupt officials highlighting the fact that it is possible to get work done without offering a bribe.
Freedom of High Seas Chairman/Managing Director Capt. Ranjith Weerasinghe, during his presentation made a humourous inference to an East Container Terminal (ECT) photograph indicating that the 80 per cent owned by the other party would be the gantry crane and all others on that side of it while the percentage owned by SLPA was just the entry point to the terminal where everyone was expected to pay a bribe to come in.
In this respect he called on the state-run institution to stop the bribing first and wanted a change in the attitude of the workers at the point of entry to the port.
He pointed out that the SLPA requires a new institution as the authority was unable to become a regulator, landlord and a port operator all at the same time.
Capt. Weerasinghe, as an example, pointed to the Port of Singapore which was corporatized and remained a port terminal operator and handed over the regulatory functions to another institution.
The establishment of a Sri Lanka Maritime Authority would be the ideal institution to take up the functions of regulation, he said.
Capt. Weerasinghe noted that Sri Lanka since its last vision of establishing itself as a transshipment hub after 1977 had no similar vision thereafter.
“I have a bad dream that transshipment business will collapse,” he said and noted that this was mainly due to the protectionist policies adopted by most states and similarly India has now suggested that its cargo should be conveyed on their own vessels. In this respect, Capt. Weerasinghe said, “Our chances are challenged”.
Promoting Sri Lanka
SLPA Chairman Dr. Parakrama Dissanayake addressing the industry briskly noted that they were currently going through turbulent times and pointed out that branding and labeling were key in marketing a port.
He related this to the recently concluded election highlighting that the power of branding and the label mattered.
Dr. Dissanayake proposed the establishment of the Maritime Promotion Bureau to promote the product adding that, “You need to have an un-politicised promotion bureau.”
He too highlighted the issue of protectionism policies adopted by states which is currently staging a comeback whereby cargo from certain countries are being asked be plied on their own vessels.
Moreover, the extension of the Panama Canal in September 2017 had contributed to posing a “huge challenge” to the region.
In addition, the mega shipping alliances have led to no differentiation as a result of which prices had not shot up and price wars were on.
While there is a need to propel productivity, the industry must look at the manufacturing footprint as well since there is a possibility that the dependency on cheap labour could be shifted to places where products are increasingly consumed.
The SLPA Chairman also noted that in aspiring for a hub status there needs to be consistent policies and noted that ships follow a port because of trade.
Building soft infrastructure was crucial as the Ease of Doing Business needs to be improved upon as Sri Lanka is currently at 118th position compared to the Mauritius at the 25th position and Rwanda at the 41st ranking.
Former Sri Lanka Navy Commander Admiral Dr. Jayanath Colombage believed Sri Lanka needs to aspire to become like Singapore and the establishment of deep water terminals like the Colombo International Container Terminal (CICT) was a priority as the port is currently reaching six million TEUs and reaching “capacity crunch.”
He noted that moving into the ECT was vital and vessels would have to be diverted if the right services were not provided.
Admiral Colombage pointed out that Sri Lanka needed to carry out a self-evaluation and ensure that it improves rankings in terms of the Ease of Doing Business Index and highlighted how Sri Lanka is considered to be one of the worst pollutants of plastic. At least 80 per cent of the ocean’s pollution starts on land, he explained.
To establish a hub Sri Lanka needs to increase its own cargo by creating the right industry and cargo with agricultural products.
He explained that Sri Lanka’s leaders need to be aware of the potential the country has but pointed out that “most leaders are blind” adding that the industry requires a vision of 25 years to set it on the right course to becoming a maritime hub.
“We are a country of missed opportunities and if we miss this opportunity it is not going to come back again,” Admiral Colombage said.
Chinese factor
Hambantota Port Group CEO Ray Ren highlighted the prospects for the Hambantota port whose services would be provided as a free port with bonded warehousing, supplying platform for Sri Lankan young talent and carrying out Ro-Ro (Roll on and Roll off) terminal in addition to a host of other services as a commercial port.
CICT CEO Jack Huang pointed out that the Hambantota Port would be looking at prioritizing Ro-Ro business and the freight and oil businesses.
He pointed out that a master plan had been developed now although it is yet to be released adding that investing US$1 billion would mean that they would deliver as they would not be going to sit back and relax but have added pressure to the staff to deliver.
At Colombo there was “huge room” for the port to grow as they were moving in other supporting services.
Mr. Huang explained that at Hambantota the port enjoyed an ideal location and is believed to play a vital role in the region as its competitors like India (does not have a deep draft terminal), Bangladesh and Gwadar in Pakistan were located furthest from the main shipping route.
He noted that should the East-West trading route open up it would contribute to a “super transshipment highway.”
During the seminar CASA also released its first quarterly publication – “Bridge” a magazine exclusively for the shipping industry that is expected to shape the future of the maritime industry in Sri Lanka with information and thought-provoking topics of discussion.