New leadership for Sri Lanka’s port sector amidst challenging times

The recent appointment of Dr. Parakrama Dissanayake to the Chairmanship of the Sri Lanka Ports Authority (SLPA) by the Government was hailed by observers given the high regard he commands within the ports/logistics sector in Sri Lanka. Parakrama is not a stranger to the SLPA as he had occupied the same post under UNP Governments for two stints. The veteran maritime industry professional was appointed Adviser to the President on Maritime, Ports and Logistics last month prior to his recent appointment.

Before Parakrama, the SLPA was headed by a retired navy commander.

The Government needs to be commended for selecting people with real-world experiences to head critical state entities as retired military veterans had not been able to make the transition from the battlefield to civil/ business administration successfully more often than not.

Logistics/ports sector is one field where Sri Lanka has a tremendous potential to excel. Unfortunately, poor planning, lack of foresight as well as policy reversals have hindered the progress of the ports/maritime industry. Parakrama is assuming the leadership of the prominent state entity at a very critical time for both the country and the industry.

Currently, Colombo Port has the only deep-water terminal in South Asia which is capable of handling the world’s largest container vessels. The premier port in the country has been ranked among the top 25 container ports internationally while being recognised as a major hub for transhipment in the Indian Ocean. Unfortunately, the port has not realised its true potential and has not evolved beyond transhipment to become a key maritime/logistics hub in Asia.

It should be understood that transhipment is a highly sensitive business as it can move easily to other ports in the region. Colombo gets about 85% to 90% of its transhipment cargo volumes from the East Coast of India and Bangladesh. Currently, Colombo Port’s position as a premier transhipment hub in South Asia is facing significant threats from regional competition, primarily due to infrastructure bottlenecks, capacity constraints, and operational inefficiencies.  Singapore as well as ports in Malaysia, the UAE, and Oman offer stiff competition to Colombo while India’s Vizhinjam International Deepwater Multipurpose Seaport – which became operational in 2025 – is expected to capture significant transhipment cargo previously handled by Colombo Port. The port has already begun attracting major container lines (e.g. - MSC) with significantly lower vessel-related charges compared to Colombo.

The Colombo East Container Terminal is expected to become fully operational by July this year after prolonged delays. The terminal was initially planned as a strategic trilateral joint venture between Sri Lanka, India, and Japan under the premiership of Ranil Wickremesinghe. The proposal by Wickremesinghe had a lot of merit as India is the largest market for transhipment cargo of Colombo Port. But it received a huge backlash from employees of the SLPA as well as trade unions. President Maithripala Sirisena could not comprehend Wickremesinghe’s foresight. The Indian presence in the flagship container terminal of Colombo Port, which can accommodate large vessels, would have raised the stature of Colombo Port. However, Sirisena gave into the pressure of trade unions.

Not undertaking appropriate policy reforms have stifled the progress of the maritime/port sector by no small measure. Foreign investment in shipping agencies and freight forwarding is restricted up to 40% of ownership and past attempts to remove the ceiling were met with stiff opposition from parties with vested interests. The SLPA operates under a structure where it simultaneously functions as a regulator, owner, and operator of ports, which creates an inherent conflict of interest apart from not serving the best interest of the economy. An independent regulator has been a longstanding need in the port and shipping sector.

For a long time, politicians have spoken about developing Sri Lanka into a maritime/logistics hub, but actions have been utterly inadequate. Now that the country is ruled by the forces who opposed and protested against reforms and developments in ports for decades, it is time to go ahead with far-reaching reforms to realise Sri Lanka’s potential in ports/maritime industry.