Financial Times

The recent crisis at the Colombo Port caused by trade union agitation on a salary issue caused panic in business circles as much as in the government.

This led to a vicious circle of events originating from blocked shipments for exporters and importers, higher surcharges, disruption to transshipment services and threats of withdrawals by major shipping lines. The news was yet another blow for Sri Lankans who are already suffering under pressure from war clouds, rising oil costs, threats of black outs in addition to ever increasing cost of living.

Though the dust has settled it was a wake up call on our precious assets and the need to manage them well given the role played by these institutions in creating opportunities for rapid economic growth, employment generation and poverty eradication. Port services are a dynamic industry in the midst of fierce competition now developing particularly in India and the Near East.

Last year performances improved in all four ports -- Colombo, Galle, Trincomalee and Kankesanturai. The total cargo handling showed a 10 percent increase in 2005 in keeping with recent trends and this trend continues even to date benefiting from globalization related international trade, productivity improvement and capacity expansion.

All indicators stood out positive, vessel arrivals (7 percent), total container traffic (11 percent) and transshipment traffic (12 percent). Direct employment showed an increase of 2 percent, however indirect employment in port related service providers such as shipping agents, freight forwarders, ship chandlers, transporters, clearing agents etc may have showed a even higher increase.

Transshipment cargo at 70 percent of the container traffic makes a significant contribution to exports by advantages in freight rates as well as quicker delivery periods providing a competitive edge. Unity Container Terminal (UTC) that came into operation on 2004 provided additional capacity of 250,000 TEU’s in addition to the existing capacity provided by the Jaya Container Terminal (JCT) and the privately owned South Asia Gateways Terminal (SAGT).

Colombo South Harbour project a priority?

The Colombo Port is now in the midst of expanding the JCT to facilitate simultaneous handling of two 8000 TEU container ships. It is disturbing to note that the implementation of the Colombo South Harbour project has yet not commenced and once completed this facility will have the capacity of handling bigger container vessels giving the Colombo Port a significant advantage in competition. This is an absolute priority. It is also understood that the Galle Port would be developed to facilitate tourism with JBIC financial assistance while the much-talked Hambantota project for bunkering too is underway. The beautiful port of Trincomalee is expected to be made to a regional Port city.

Need for speedy dispute resolution

We have often seen industrial dispute-led conflicts leading to strikes in the public sector-controlled economic infrastructure facilities in transport, energy (petroleum and electricity) resulting in loss of productive capacity adding to people’s financial burdens.

Similarly health and education sectors in the social infrastructure field have been no exceptions. Conflict resolution has been associated with Sri Lankan culture and history since the period of ancient kings, and some of the practices continue even to date in some rural areas. Director General of the Employers Federation of Ceylon (EFC) Gotabaya Dassanayake told The Sunday FT that a satisfactory dispute resolution process exists in the private sector, working as a sound mechanism to resolve employer/employee conflicts, but he lamented that dispute resolution is totally absent in the public sector and a definite need exists to strengthen this area.

Perhaps as repeatedly pointed out by this column we should follow the example of the EFC the private sector institution fully engaged in wage negotiations, collective bargaining, dispute resolution etc. EFC is a resource rich unit comprising of experienced qualified, trained experts in the relevant fields of employee relations.

In the absence of a formal conflict resolution system in the public sector it’s common for the minister in charge to get directly involved. This practice must be changed and its best these sensitive administrative mechanisms are left to the executive, the administrators who are better versed as well as trained in human resource management – and not to the politicians. It is sad that even proper human resource functions do not exist in public sector institutions.

Today arbitration has emerged as a valuable and inexpensive speedy tool in dispute resolution in the commercial world, however industrial disputes are excluded from the provisions of the Arbitrations Act. Its time this issue is looked into seriously.

Quality of management

There was rightful indignation from the business sector on the sudden trade union action and its adverse impact.

Nevertheless it must be admitted what was witnessed was only a symptom of a major malady affecting state owned enterprises (SOE). More often than not the root cause at the bottom for disputes is some lapse in the administration that has a bearing on the welfare of the employees.

Due to poor management practices such disputes are magnified and left to the politicians to decide. True that today we do not have administrators in the calibre of Wimal Amarasekera or Lionel Fernando or engineers like A. N. S. Kulasinghe who stood out as beacons in the Port administration.

It is the duty of the government to strengthen the state institutions with human resources of a high calibre and effective leadership or utilise private sector resources.

The SAGT is a good example; it has not only improved port performance but through competition has motivated JCT too to do better. It’s reliably understood that JCT is yet saddled with outdated IT systems incompatible with the demands of major shipping lines.

Since port services are a highly competitive marketable commodity, foreign exposure is a must for key personnel in all disciplines as port management is a highly specialised function.

Present electoral system and the frequent changes of governments too have contributed to a breakdown of quality and consistency in the state sector. The pertinent question is can state-managed institutions like the port which are in the global market operate in this unstable environment?

Port a national asset

Putting together these factors all stakeholders must recognise and accept that the port is a national asset of immense value and the services of this institution should continuously be improved with latest technology backed by quality human resources to maintain its marketability.

The port creates significant numbers in employment directly and indirectly, boosts exports and attracts foreign investment thus contributing to the well being of every Sri Lankan.

Port employees at all levels should be proud of their contribution. If institutions like Ports are managed efficiently the government will not be compelled to increase taxes to augment revenue.