News
Shipping agents object to monopoly to Avant Garde and Rakna Arakshaka Lanka
A joint venture between Avant Garde Maritime Services (AGMS) and the Defence Ministry’s Rakna Arakshaka Lanka Ltd (RALL), promoted by the President’s office to monopolise a lucrative business — the transfer of seafarers between vessels, hotels, ports and airports — met with stiff objection from the country’s shipping agents who handled the business all these years.
In late May, the Ceylon Association of Shipping Agents (CASA) received notice signed by Admiral (Retd) Jayanath Colombage, Additional Secretary for Foreign Relations at the Presidential Secretariat, that President Gotabaya Rajapaksa gave permission for a public-private partnership between Avant Garde and RALL to run isolation centres for seafarers during the pandemic. The joint venture was also to take over the transport of ships’ crews between various destinations.
Shipping agents, who had separately been lobbying the Government to resume crew changes after a COVID-19 fuelled suspension, were taken unawares. But they shot back with their own proposal which envisages them taking back the business under strict health guidelines.
This has now been approved, says a new letter to CASA from Admiral Colombage. Accordingly, shipping agents are once again authorised to carry out seafarer repatriation, sign-on and sign-off from ships, as well as arrivals at and departures from Sri Lanka’s international airports.
CASA will still need permission from the Sri Lanka Army and the Health Ministry for the operation. It has identified three hotels as isolation centres — including in Galle — and one has already been cleared. However, Army approval is also required. CASA Chairman Ikram Kuttilan expects the process to be smoothed out by tomorrow or Tuesday.
Shipping agents will also have to make arrangements for on-arrival PCR tests after the Presidential Secretariat directed on Friday that these are forthwith mandatory for crews, whether at ports or airports.
Avant Garde is still permitted to offer transport and isolation services if any shipping agent requires it. But it will no longer hold a monopoly.
Crew changes only restarted at the beginning of June. This was after shipping agents pointed out to the Sri Lanka Ports Authority (SLPA) that both Sri Lanka and the industry could gain from opening up before other countries did. Indian crews, for instance, are languishing on vessels despite finishing their contracts because of the serious nature of the pandemic in their country.
If crew changes — where seafarers finishing their contracts disembark and fly out and new crews fly in and embark the vessel — could be offered in Sri Lanka, it was possible to draw new business here.
The Government agreed but also unexpectedly floated the new arrangement between AGMS and RALL. And, since the first week of June, this joint venture has handled crew transport and accommodation in exchange for fees from shipping companies. It was a service the agents had never sought as they handled the operation themselves — with the Navy — for years.
For providing security to transport and isolation centres, RALL — AGMS’s old business partner — was to receive a 35 percent profit share. AGMS charged a fee for every crew member it transported from a port or airport to accommodation. It also made seafarers who arrived on one ship wait around for crew of other ships (sometimes five to six hours) so that everyone could be taken together to a destination. This was for the purpose of cutting costs and maximising profit.
As AGMS has no port entry authorisation, seafarers had to disembark at the entrance and transfer to vehicles of the respective shipping agents, risking exposure.
“Their transport fees were exorbitant,” an authoritative source said. AGMS charged US$ 45 (Rs 8,391) for the first passenger and US$ 25 (Rs 4,661) for each additional passenger from Bandaranaike International Airport (BIA) to Colombo; and US$ 125 (Rs 23,309) for the first passenger and US$ 65 (Rs 12,120) for each additional passenger from BIA to Galle.
Shipping agents typically charge per vehicle, irrespective of the number of passengers, and protested at the rates they were being forced to pay. Under the AGMS-RALL arrangement, agents were also still expected to sign bonds with the Department of Immigration and Emigration for each crew member to ensure they are properly repatriated. But they lost income from transport and hotels. And they were unable to use their staff or vehicles set aside for crew transfers.
“This business was done by around 35 to 40 agents,” Mr Kuttilan said. “They marketed it, generated the business and brought additional revenue to the country. As long as there are proper controls and guidelines are followed, there is no risk.”
“Furthermore, our proposal was better,” he said. “We gave options in Colombo and Galle and our costs were cheaper. AGMS’s selling point was the tie-up with a Government entity.”
Once the contract of a ship’s crew member ends, he disembarks at a port and flies out. His replacement flies in and boards the vessel on his own contract. With around 23,000 changes a year, the handling of these seafarers — food, transport, accommodation and plane journeys — generated significant income.