Financial Times

Whilst in Sri Lanka the rhetoric, on the construction of Colombo South Harbour continues unabated, thus creating a sense of illusion, the Indian government has approved a tender submitted by a consortium of two Chinese companies and an Indian Partner to develop an international container terminal at Vizhinjam Port at a cost of US$ 1 billion.

Vizhinjam which is only 10 nautical miles from international shipping routes has a natural draught of 24 meters and when commissioned will have a capacity of 4.1.million TEUS a year.

The Colombo Port as reflected in the Central Bank annual report of 2005 has witnessed a slowdown in the growth of container throughput for the year 2005 as against 2004. It is already congested on numerous days, which seriously erodes its productivity levels particularly at the Jaya Container Terminal. Shipping lines require Container Terminals to maximize the productivity of every container lift cycle. That’s why the trend is towards twin, tandem or quad lifts from ship to shore and on the yard. Having only one deep draft entrance channel in the Port of Colombo has exacerbated the problem of waiting time of Container Vessels.

Would we slip back to the late 90’s when some feeder operators chose to impose a congestion surcharge, severely undermining our position as a hub port?

Meanwhile Jaya Container Terminal continues to lose its market share of high revenue yielding domestic containers to SAGT. During 2005 its market share of domestic containers fell by 56% from around 65%. More importantly during the month of April 2006 SAGT has handled 116,268 TEUS witnessing a growth of 46%. SAGT managed by an international terminal operator has proved that with enhanced efficiency it can handle far more than it’s designed capacity of 80,000 TEUS per month.

The SLPA embarked on the development of Colombo South Harbour engineering designs in the year 2002, and its foreign consultants in the initial business plan of October, 2003 has stated that “the long term market forecasts after taking into account competition indicates positive potential for Colombo South Harbour which can be exploited provided that additional port capacity is brought in by 2009, and to facilitate this enabling legislation and port reform is required.”

Going by current trends additional capacity is required by the year 2008. To induct additional capacity by the year 2008 we should have commenced the construction of Colombo South harbour by end 2004. With mega ships coming on stream, and shipping lines, choosing to induct direct callers into India, the possibility of the Port of Colombo emerging as the mega hub of South Asia may turn out to be a pipe dream.

The Central Bank report has proposed that the SLPA rather than concentrate on current issues should focus on development and implementation of plans raking technological advancements in to consideration. What we need from the port management is action and action with less or no talk.