Delays at Colombo Port cost $600 m annually
Sri Lanka is incurring approximately US$600 million on an annual basis in port and liner demurrage costs and 80 per cent of it is attributed to Customs and government clearance delays.
The inefficiencies weaken national competitiveness, increase import costs and raise consumer prices, former Chairman of the Association of Clearing Forwarding Agents and President of the Association of Customs House Agents and Wharf Assistants Mohamed Niyas told The Sunday Times Business.
He pointed out that there is an urgent need for reform at the ports to improve its efficiencies and this could be done without “commissioning further studies on well-document issues.”
Sri Lanka’s import container dwell time averages seven days, which is significantly longer than global benchmarks.
In initiating faster clearance, Mr. Niyas noted that as one of the key stakeholders within the industry some of the key pointers highlighted are advance submission of Customs Declaration before vessel arrival; eliminating redundant and duplicate customs inspections; streamlining clearance procedures to minimise delays; centralizing 22 separate customs investigation units into a single Automated Risk Management Unit; Automated Risk Management for Break Bulk and Less than Container Load shipments; and Replacing manual screening for 500 BOI Customs Declarations with automated assessments.
He noted that Laugf Gas had to place an Rs.850 million bank guarantee for an LP Gas import due to an additional clause in the latest SLSI Gazette revision. Such bureaucratic hurdles drive up operational costs and burden consumers with higher prices. As a result the LPG Gas price was increased from Rs.3680 to Rs.4100 effective March 31, an increase of Rs.420.
Mr. Niyas asserted that Sri Lanka needs to move beyond fragmented, outdated processes to ensure that a unified, efficient import clearance system could be brought about. This will help lower costs; accelerate trade; and reduce financial pressure on businesses and consumers.
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