The Sri Lanka Ports Authority (SLPA) has landed an upward tariff revision on 1 January, increasing cost for exporters and importers allegedly without notifying the trade or the new Minister.
Industry sources said the Port’s wharfage tariff for export containers and import containers and handling of their LCL (Less than Container Load) cargo has been exorbitantly increased by more than double, which is a dollar-based calculation. Additionally, demurrage free times have been reduced, too.
The 20ft rate has been increased to $35 from $16, and 40ft price to $70 from $32. In addition, the LCL charges have been abolished and a box rate has been introduced, which is an increase with a new mechanism making small exporters’ and importers’ costs indirectly vulnerable for a greater increase than published.
Exporters and importers said that they have already informed the relevant authorities and questioned why the hike was effected at a time when the SLPA was increasing its revenue through massive transshipment growth and record profits with debt burden over Hambantota Port relieved by the Government. In 2017, SLPA recorded its highest profit of Rs. 13.1 billion whilst the figure for last year is pending.
In fact, as a trade facilitation institution, when transshipment grows, the SLPA should have reduced charges to boost the local exporters and help the Government to reduce cost of living for the benefit of the consumer.
“Anybody can show results by increasing charges with volume growth.That is not good management.These institutions need reforms and reduction in unnecessary costs,and eliminatingof bribes and delays to be more efficient to increase the bottom line,” argued an industry expert.
“These tariffs are based on the dollar hence SLPA, being the only organisation in the supply chain that enjoys such a tariff, gets the depreciation benefit, which was nearly 20% last year alone and volumes have been increasing,” he added.
Industry sources said that Prime Minister, too, has been notified and said that one very high official from the Ministry has denied a tariff revision. However, industry bodies such as the SLFFA, JAAF, NCE, Rubber Exporters, Tea Exporters, Importers and other chambers have submitted a circular and the proof of the increase to the relevant Minister,questioning the high official’s motives of denial.
“The move is a shocker to the new Minister and the new Chairman, who is to take over this week. Obviously, the process would have taken place few months back during Mahinda Samarasinghe’s period as Minister, but implementing on 1 January without properly briefing the new Minster and the trade is quite arrogant,” an exporter complained.
A ready-made garment trade representative observed that the process change itself is a violation of the freight payment Gazette issued by the Government and it is a double expense increase as they import a large volume for export processing as well.
“We expect a quick resolution from the Minister, SLPA and the Government as it is an unjustified increase and a process change without understanding the repercussions and the country’s interest at a crucial time.Whoever is responsible should be questioned for such unprofessional behaviour,” industry sources said.
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