Financial Times

SLPA to raise container capacity to 4.5 mln TEU

The Sri Lanka Ports Authority (SLPA) plans to increase container-handling capacity at its terminals in Colombo port to 4.5 million boxes to meet demand following the strong recovery in transshipment volumes and the clinching of exclusive agreements with some of the world's biggest shipping lines.

The SLPA is seeking grant aid from Japan for the consultancy study to increase capacity, SLPA's Parakrama Dissanayake said.

Once the planned expansion is in place the SLPA would have "unbeatable capacity" at its terminals compared with other container ports in the sub-continent, he said.

The SLPA operates the Jaya Container Terminal, Colombo's main transshipment facility, and Unity Container Terminal, a facility for feeder vessels.

These terminals would have a capacity of around three million TEUs (Twenty-foot Equivalent Units or boxes) once three pier-side gantry cranes ordered for the UTC are delivered next February.

"We're planning to increase capacity from there by 50 percent to 4.5 million TEU," Dissanayake said.

This will be done by modifying JCT berth 4 and building an additional berth.

The planned capacity increases come in the wake of better productivity at the JCT, which has improved vessel turnaround time and made it more competitive.

Dissanayake said the SLPA had signed terminal service agreements with Maersk, Evergreen, APL, Hanjin, and Zim-Goldstar to exclusively patronise the JCT.

Under the agreements the lines have committed sizeable volumes to be handled at SLPA terminals for which they have been assured better productivity. "Now, apart from our comparative advantage given Colombo's geographic location near the East-West trade route, we have a competitive advantage," Dissanayake said.

"There has been phenomenal growth in transshipment volumes in the first few months of this year," he said.

In March Colombo port has handled 115,884 TEUs of transshipment containers recording a growth of 23.6 percent as against the volumes handled in March 2002. The surge in volumes at Colombo has been attributed to productivity enhancement measures combined with the aggressive marketing approach adopted by the JCT and South Asia Gateway Terminals run by a consortium led by P&O Ports.

Dissanayake also said that as part of the corporatisation of the JCT, Pricewaterhouse Coopers had been hired to examine the restructuring and draw up a management contract between the terminal and the port authority.

The consultancy contract to develop engineering designs for the proposed New South Harbour, next to the existing port, is expected to be awarded in about three weeks, Dissanayake said.

He also said he was not worried by aggressive plans by Indian ports and investments by P&O Ports to expand container capacity in Indian ports given Colombo's strategic location and improved competitiveness.

"Enhancements in capacity in Indian ports should help Colombo," he said. "India's problem is the lack of container capacity.

"India has almost 100 million tonnes of breakbulk cargo which can be containerised. For that to happen India needs extra container capacity in her ports." India's main container terminals at Nava Sheva and Jawaharlal Nehru Port Trust were almost saturated and Indian authorities were planning to convert bulk terminals to handle containers as well as building new ones. "Container ships are becoming larger and larger and that will make it harder for them to deviate from the main shipping routes - large ships can only be serviced through hub ports," Dissanayake said.

US offers small grants for peace-related projects

US Ambassador Ashley Wills said last week the United States was confident that the temporary suspension of peace talks by the Liberation Tigers of Tamil Eelam (LTTE) is unlikely to stall the peace process.

"We are confident that the attempts at peace (by both sides) will continue. We believe there is too much at stake for both sides to abandon the gains that have been seen from the process," he said at the launch of a small-grants assistance programme in Sri Lanka to be implemented by USAID's Office of Transition Initiatives (OTI). The $3 million programme will provide rapid, flexible assistance to small projects across the island aimed at peace building and other pro-peace activities. The two-year programme titled "Promoting the Benefits of Peace" will be implemented through Development Alternatives Inc. (DAI), a US-based institutional contractor, hired by USAID/OTI to handle these programmes..

DAI's Colombo office was opened by Wills who said two more field offices would be set up in Trincomalee and Ampara. OTI - through DAI - already has similar programmes in Afghanistan, Macedonia, Angola, Burindi, Venezuela and other countries.

OTI serves as a rapid, deployment agent that addresses transitional issues between relief and development that cannot be immediately funded by other USAID mechanisms.

DAI officials said they have so far identified 30 projects for small grants in the north, east and the south of Sri Lanka.

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