Development of ports will accelerate economic growth: SLPA Chairman

By Devin Jayasundera

The influential role that the country’s ports system will play in the growth of the economy was outlined by Sri Lanka Ports Authority (SLPA) Chairman Dr. Priyath B. Wickrama at the Ceylon Chamber of Commerce (CCC) Import Section Members Gathering held at the Ceylon Continental recently.

Delivering a presentation titled ‘Importance of Rapid Port Development and its Impact on the Sri Lankan Economy,’ Dr. Wickrama stressed that an effective port system was needed to expedite the economic development of the country.

“This will give the opportunity to take advantage of rapid globalisation and the liberalisation process that’s happening all around,” he said.

He also mentioned the urgent need to restructure some of the ports to accommodate mega container ships. “Maersk has already ordered 20 mega carriers which have a capacity of 18,000 TEUs and these will be delivered to them by 2013/2014. In such a situation, we should be prepared for them.”

The construction of the 400m container berth in the South Harbour of the Colombo Port is an important restructuring element that needs to be done, as certain shipping companies such as Maersk have already shown their displeasure over the inability of Sri Lankan ports to accommodate these big carriers, confessed Wickrama.

He divulged that Maersk would ship out of Sri Lanka if these needs were not met, which would in turn be a huge blow to the economy.

He held his predecessors as the main culprits responsible for this situation. “If these steps were implemented by my predecessors, we would have already been able to accommodate mega containers. It is due to their short sightedness that effective steps have not been taken to keep up with the advancements of technology in the shipping sector.”

“Some of the containers handling equipment at the Colombo Port are over 25 years old,” noted Wickrama.

Currently the SLPA is replacing most of this old equipment and has already ordered six gantry cranes, 30 yard cranes and 50 yard tractors. There will be a minimum of four gantry cranes for a ship in the harbour.

Dr. Wickrama also shared some of the key developments and the current status of the ongoing harbour expansion projects of the Colombo Port.

The first phase of the 600m berth will be operational by early 2014 and after the next two phases, the port will have the ability to handle a capacity of 13 million containers. This is two million containers in each terminal.

With regard to the Hambantota Mahinda Rajapaksa Port, he said the vision of the port is to function as a service and logistics hub which will be a centre point that is assisted with a network of sea, air, rail and road.

Under Phase One of the project, in addition to the general cargo berths, the port is equipped with oil and gas terminals, an oil tank farm with a bunkering facility, warehousing facilities, vehicle assembling plants, food processing plants, cement handling plants, fertiliser handling plants, chemical processing units and even cattle facilitating.

He also said that 14 investors have already agreed to invest US$ 700 million to set up these factories and construction is supposed to start from next month.

He also responded to the ongoing speculation over the rock in the entrance canal at the Hambantota Port. “We have already completed the dredging work and there was no rock at all, other than a small rock which took only two weeks to clear.”

He also mentioned some of the development plans for the Trincomalee Port, which is being developed mainly as a hub for eco-tourism and also as a centre for importation of raw materials.

Simultaneously Oluvil and Galle Ports are being enhanced and developed to assist regional economic development, stated Wickrama.

SLPA hopes to invest US$ 3 billion in the development of ports and local and foreign investors are to invest US$ 2 billion in areas of construction of terminals, manufacturing, etc., according to Wickrama.

He also noted that SLPA’s target is to make available the infrastructure facilities surrounding ports to local private sector entrepreneurs to establish port-related industries and is expecting at least US$ 5 billion investment by them in 2015.

Import Section Chairman Mahesh Wijewardena commented that the Import Sector had received many positive outcomes in the 2010 Budget, adding that it was satisfying to see that the changes in 2010 were sustained in this year’s Budget.

“This shows strategic and long-term intent policy versus the short-term and inconsistent changes that we experienced in the past,” he added.

However, with regard to the import sector situation after the 3% devaluation of the rupee, he said that it took them by surprise and as a result of it the cost of imports would be increased.