CSC secures foreign exchange saving through coal shipping deal

Monday, 3 October 2016 00:01 - - {{hitsCtrl.values.hits}}

From left: Danthanarayana - Manager Chartering, Nihal Dharmapriya - General Manager, Dr Malika Gunasekera - Executive Director, Shashi Dhanatunge - Chairman, Capt. Karai - Director, USL (India), Bilimoria - General Manager, USL (India), Hilme - Director, USL (SL) and Prasanna Samaranayake - AGM Legal

Through a historic tender bid offered for lightering coal at the Norochcholai Thermal Power Plant, the Sri Lankan Government was able to secure a large saving in foreign exchange recently.

The tender, which was open to international bidding, was contested for by three Indian companies that provide barge operations. The successful bidder, United Shippers India Ltd., was selected by the Special Cabinet Appointed Procurement Committee on the recommendations of the Project Committee that looked into the technical evaluation of the bids so far received.

The National Carrier of Sri Lanka, Ceylon Shipping Corporation (CSC), a fully Treasury-owned company which functions under the Ministry of Ports and Shipping, operates as the main transporter of coal to the country. The Ceylon Electricity Board through its procurement agency, Lanka Coal Ltd., entrusts CSC to handle the coal requirement for the entire country through Mother Vessels up to the outer jetty of Puttalam, and thereafter lighter the coal by way of barges in order to carry it up to the jetty at Norochcholai.

During the 2015/2016 season, CSC was able to obtain $ 0.21 per metric tonne from its subcontracting barge operator in the entire lightering process of 2,200,000 +/- 20% metric tonnes amounting to nearly $ 462,000. However, the new Board of Directors appointed under the Yahapalanaya Government by Ports and Shipping Minister Arjuna Ranatunga decided to refloat the particular tender seeking higher revenue for the country.

This decision has generated enormously positive results by obtaining a higher competitive address commission than ever before. The successful bidder offered an address commission of $ 1.56 per metric tonne against a mere $ 0.21 per metric tonne from the previous operator.

The timely and prudent initiative of the Board at CSC has enabled the Sri Lankan Government and the Treasury to secure a huge saving for the national economy.

CSC also provides vital maritime training for Sri Lankan seafarers on board their new vessels, MV Ceylon Breeze and MV Ceylon Princess, as well as charter ships. This exercise enables young Sri Lankan marine cadets to undergo their compulsory sea training to become fully-qualified seafarers, adding pride to the National Carrier and revenue to the national economy.

The Chairman of CSC said that the additional revenue saved through this competitive tender would bear immense benefit by meeting part of the shipbuilding expenses incurred for the same purpose of having coal delivered to CEB with the assurance of granting yearly business, which is not to be so due to the Sampur project being halted.