Sri Lanka Ports, Trade and Logistics Conference kicks off

By Cheranka Mendis

With the shift in global commerce from the West to the East, many doors have opened for the Asian region to drive forth growth and development.

With India and China behind the continued rise of the emerging markets, the region’s growth is expected to be 7%, representing 22% of the world population. India stands to represent 1.1 billion of the population and is expected to be crowned as the most populous country by 2020.

The express development is likely to result in a volume overflow in the Indian subcontinent with Indian exports to China growing at an average annual rate of 22%, while flows in the opposite direction expand at an average rate of 18.5%.

Positioned strategically in the middle of the two powerhouses, Sri Lanka stands to gain immensely by building and facilitating a hub status in the maritime and trade fronts which could ensure efficient flow of cargo and containers between the two economies and the world.

Sri Lanka Ports Authority Chairman Dr. Priyath B. Wickrama yesterday addressing the inauguration of the two-day conference of the three-day Sri Lanka Ports, Trade and Logistics Conference, Exhibition and Awards noted that the country had identified the strengths and avenues for unprecedented opportunities for accelerating growth in diverse sectors due to the intra-Asia trade.

Having already taken steps to develop infrastructure facilities in the port sector with mega ports of 15 to 25 metres of depth, cargo villages and introduction of ICT to the system, Sri Lanka envisions becoming the “catalyst of South Asia” in the future.

“In order to maintain higher productivity of the port activities and to attract additional volumes, existing port facilities are being developed on a fast track basis,” Wickrama said. “Internal port roads are being widened to ensure smooth and efficient flow of vehicular traffic from and to the port.”

Simultaneously, dry ports or cargo villages are being set up to extend actual benefits from inter-model transport ensuring faster turnaround times if vessels, trucks and transfer of cargo and containers.

 Colombo Port expansion 

Launched with a view to develop and expand existing Colombo Port with three container terminals each, the Colombo port expansion looks at enabling three container terminals of three berths with 1,200 metres length. The port will have a minimum depth of 18 metres and access channels will be maintained at the depth of 20 metres.

Wickrama stated that the construction work of the first berth of the South Terminal was nearing completion and would be operational within the next few months. “The other two berths of the South Terminal will be operational by 2014. The East Terminal which is also known as the second terminal is also being developed and the first berth in this is expected to be operational by end 2013.”

At the completion of all terminals the port will add 7.5 million TEUs to the existing capacity. The East Terminal is to be managed by Sri Lanka Ports Authority while the South Container Terminal will be operated by Colombo International Container Terminals Ltd. on a BOT basis.

Steps have already been taken to set up a cargo village about seven km away from the Colombo Port as a one-stop-shop customer service centre.

 Magam Ruhunupura Mahinda Rajapaksa Port development 

Developed as an industrial and service port that spans across 3,000 hectares, this port will consist of general cargo berths, Ro-Ro berths, service berths, oil and gas berths, and container berths. “We are confident that MRMR Port could attract business as it is located about 12 nautical miles away from the shipping route from the East to the West.”

Wickrama noted that Phase I of the project has made available draft up to 16 metres with a channel width of 210 metres and a turning circle of 600 metres. “Construction of Phase II of the project which includes six berths will be completed by 2015.” The port will also have facilities for bunker operation and will look at the establishment of dry rocks and expansion of tank farms.

 Oil and gas exploration

Commenting that the country has observed high activity in the sub continent in petroleum products, Wickrama said that opportunities have arisen for Sri Lanka to facilitate oil and gas markets in countries such as India by connecting the east and west coast of the eighbouring India.

“Sri Lanka has already called for bids for the issuance of oil and gas exploration license in order to explore petroleum resources within the territorial waters of the country,” he asserted. “We are concerned to develop off-shore services for deep draught vessels as a regional industrial and service centre.”

Building recreational facilities 

With SLPA being given autonomy to bring in private sector management systems even though the authority is a public sector company, SLPA has plans to reclaim some 230 hectares of waterfront with the shelter of new breakwater of the Colombo Port Expansion. He noted that the area would be developed as a port city with shopping malls, sports areas, hotels, recreation facilities, etc.

“We have also initiated steps to develop an island in Hambantota to diversify our business in the areas of recreation and tourism,” Wickrama said. SLPA will develop port lands in strategic locations to set up free trade zones, investment zones, recreation areas, etc.

Targets

“Government has plans to attract approximately 3-4% of the country’s GDP annual as FDI,” he expressed. “With the establishment of such areas over and above our usual contribution, SLPA’s vision is to contribute US$ 10 billion to the national investment strategy.”

 Other port developments

In view of Sri Lanka’s potential as maritime and logistics hub of the region SLPA has also embarked on several massive development projects. “We intend to invite offers from the port and terminal developers for the construction and operation of the West Terminal of Colombo Port Expansion.”

SLPA has been successful in selecting seven investors putting in an investment close to US$ 7 million under the first Request for Proposals (RFP) to develop port related industries near the Hambantota Port. Under the second RFP proposals have been invited for joint business ventures in the Port City in Colombo for local and foreign entrepreneurs.

Steps are also been taken to set up an Industrial Zone which facilitates tourism with whale watching, etc within the land owned by SLPA under the development program of Trincomalee Port.

Galle Port will be developed as a tourist destination with facilities for mooring of yachts in the marinas while passenger terminals with all facilities are to be made available with connectivity to the Colombo-Hambantota highway.

 Inviting investors

“Sri Lanka has realised the necessity to grow on the basis of deeper integration with global production process and international markets,” Wickrama assured. With underlying economic relations between India, Pakistan and Bangladesh remaining strong in favour of deeper integration, investors will get an opportunity to access these large markers in the Indian subcontinent.  “We invite you all to avail of this unprecedented opportunity and be a partner with the rapid development of Sri Lanka,” Wickrama added.

Pix by Upul Abayasekara

In the dark

Key Government stakeholders, be it ministers or other institution heads, seem to have a knack of either coming in late for events or arriving just in time to deliver their speeches.

Central Bank Governor Ajith Nivard Cabraal who was in time for his speech but missed out on the morning inaugural session yesterday made an awkward mistake when he noted that the country enjoys ‘uninterrupted’ power supply, while only few minutes ago, when the tea break was called after the inauguration, the Hilton Ballroom was plunged into darkness thanks to an interruption in power.

This brought out a welcome breather as the audience members were seen snickering while the Governor continued his speech.

Emerging investment opportunities - CB CHIEF



Sri Lanka’s remarkable transformation in the economic landscape of the country will not stop now and will continue its momentum in the next few years, maintaining a steady growth rate of over 7.5%, Central Bank Governor Ajith Nivard Cabraal said yesterday. The expectation is to reach a US$ 100 billion economy by 2016.

Listing out the highlights of the country’s performance to international delegates attending the conference, Cabraal noted that the country’s macro fundamentals were now stable, having emerged from a three-decade war four years ago. He assured that necessary steps were being taken to continue steady growth and a sound macroeconomic system followed by the single digit inflation currently enjoyed by the citizens.

“We will ensure an enabling business and investor environment in the country,” the Governor said. “As at now none of our banks have collapsed and we have taken supervisory measures to ensure there is growth in the banks.” Currently assets held by banking sector are Rs. 5.5 trillion.

Sri Lanka’s balance of payments recorded a surplus last year and this year too, the results are likely to remain on the bright side, he said. Debt levels have been coming down in Sri Lanka, with public debt to GDP at less than 80%. “We are working on bringing this down further.”

“Our per capital income has risen from less than US$ 1,000 few years back to US$ 2,923 in 2012 and is expected to reach US$ 4,000 by 2016,” Cabraal said, “we are well on track to achieve this figure.”

Foreign investment has been at satisfactory levels and the steady flow of income coming in from this has and will continue to drive development forward, he asserted. “We maintain low unemployment rate and are on our way towards 2% poverty alleviation by 2016. We are looking at a gradual reduction even though we have already experienced a sharp drop in this regard.”

Three key strategies have been taken to support the target which is the provision of electricity to all (93% of the island has access to electricity), provision of roads (highways are being built and 60,000 km of rural roads are being regularly concerted) and access to finance.

Fiscal deficit has been managed and will reach 65% by 2016, he said. “We are also sure to see a growth in the stock market this year.” Investor confidence has also risen over the years with sharp interest in bonds.

“We are on the right track towards development and achieving the goals set out by President Mahinda Rajapaksa. We have designed our plans to get to the position on a yearly basis and to reach the upper middle income status in 2016,” Cabraal acknowledged.

Sri Lanka the envy of developed nations: Namal



Sri Lanka may well be the envy of developed countries today with the impressive growth rate recorded at an averaging 7.5% for the past seven years despite the negative growth impact in the west, MP Namal Rajapaksa announced yesterday.

Speaking at the inauguration ceremony of the two-day Sri Lanka Ports, Trade and Logistics Conference, Rajapaksa delivering a speech on behalf of President Mahinda Rajapaksa acknowledged that the Government was keen to continue the growth impetus within the next few years to elevate itself from the current position of lower middle income country.

Determined to not be trapped in this position having moved up from the low income category in which Sri Lanka was trapped for a long period, necessary development drives are being conducted to move on to upper middle income level by 2016. The large scale infrastructure and development projects seen islandwide are proof of this, he said.

“Sri Lanka is at an advantageous position geographically in terms of trade and commerce as our country is situated in the important maritime trade locations of India and China. With the completion of the ongoing development in ports, we could well establish ourselves as a hub in the region,” Rajapaksa expressed.

Confident of regaining the position as a key navigational route in the world, he noted that the present growth in commerce and trade would be driven forward to link Sri Lanka as a mega investment product and a key trade hub of Asia.

“Sri Lanka is a new land of opportunities. We welcome you to be part of this and offer us your valued participation,” he called out to the audience. “We will soon be the maritime hub of the globe’s South, offering new prospects for investors.”