The Ceylon Association of Shipping Agents (CASA) yesterday welcomed the proposed new revival deal for the East Container Terminal as part of the expansion of the Colombo Port.
Minister of Ports and Shipping Sagala Ratnayaka at a recent inspection tour of the Sri Lanka Ports Authority (SLPA) emphasised on the importance of expanding the Colombo Port’s capacity to ensure its sustainable growth.
In a recent statement the SLPA said the envisaged partnership with Japan and India to develop the East Container Terminal (ECT) would help the Port of Colombo continue with its growth momentum and further improve its position.
The three Governments are expected to sign a Memorandum of Cooperation (MOC) over ECT, through which SLPA asserted 100% ECT ownership will be retained with Sri Lanka. A Terminal Operations Company (TOC) is said to be formed to conduct ETC operations which will be jointly owned where Sri Lanka will retain 51% and the joint venture partners will purchase a 49% stake.
“SLPA going ahead to speed up the operationalisation of ECT is indeed heartening news to the maritime industry stakeholders in Sri Lanka,” CASA said.
CASA had been stressing on the need for adding capacity at a brisk pace in order to retain Sri Lanka’s position as the Best Connectivity Port in South Asia. It is also a significant achievement as it is the first time in history that the Port of Colombo has topped a global maritime ranking. With this growth, the Port of Colombo has leapt ahead of many other Asian, Middle Eastern and European Ports.
The Port of Colombo recorded 13.5% growth in 2018 over the same period of the previous year, reaching 22nd from the position of 23rd amongst global container ports, according to Alphaliner Monthly.
“If this growth momentum continues, we can assume that all the terminals in Colombo will reach full capacity and therefore adding capacity at a brisk pace is the most crucial factor for Sri Lanka to retain its position as the Best Connectivity Port in South Asia,” CASA said.
It emphasised that immediate measures should therefore be taken to operationalise the ECT which is designed as a deep water terminal. It is disappointing that no strategic decisions pertaining to the expansion of the Colombo Port’s capacity were made during the last few years despite the industry highlighting the urgency.
“The proposed arrangement made by SLPA is in indeed encouraging as the Ports Authority will retain control over the ECT whilst the foreign investment will expedite the operationalisation of the terminal,” CASA said.
A second deep water terminal is a must for Colombo as it is facing the risk of losing cargo to regional competitors. As Sri Lanka gears up to become a regional hub, many other countries are turning to port development to accommodate growing volumes. India, for instance, has launched the Sagarmala initiative, a $ 126 billion port-led development project designed to address India’s capacity constraints.
“Therefore this joint venture will bring the much-needed investment for ECT whilst retaining the control with the State-owned SLPA, promoting the national interest of Sri Lanka,” CASA added.