Will Sri Lanka loose its hub status and virtually be a feeder Port? Politics prevents ports progress, competitiveness in international shipping

It’s running out of time for Sri Lanka. Once Sri Lanka was way ahead of Singapore in 1960’s but lost its competitiveness due to lack of leadership from our political leaders who governed the country. Sri Lanka has a good potential to become the hub of the South Asian region, as it is located in a strategic position for major East-West trade routes. However, it is now uncertain because we are way behind schedule for building the ports to the required standards to be competitive. For example the ports of Colombo, Galle, Hambanthota, Trincomalee and not forgetting the KKS harbour even though it’s with wreckage from the North –East War where many gunboats were sunk by the LTTE. Trincomalee is considered one of the largest natural harbours in the world which most countries like India and the US having an eye over the port to have a stake, If Hambanthota had made ground it could had attracted many mainline vessels which travels in the main sea routes, as it is in a strategic location that could be a threat or competition to the world famous transshipment port of Singapore, where 225-275 ships pass by daily from the main shipping route, where only about 50 ships divert to Colombo Port daily. With the Colombo South port unable to make ground due to various political and economic uncertainties, it has been delayed by 3 years. If it had gone according to plan it would have commenced operations by end of this year.

Since the Government had not taken the necessary initiatives to construct the Hambanthota port, we are now about 2 -3 years behind schedule. As for India they are constructing a large terminal a the capacity of 4.1 million TEU’s (Twenty foot Equivalent Units) annually at a cost of US $ 1 billion at Vizhinjam, which is only 10 nautical miles away from the main shipping route. And also with the Sethsurendram Channel being exploited for construction, where big vessels could cut across and reach their ports without calling at the Colombo Port, Sri Lanka will loose its competitiveness, it once had.

For a country to develop its infrastructure it should be in a conducive environment, otherwise it will not be able to compete nor attract investors or tourists to the country. For example the air traffic is growing with passenger and cargo transportation seeing an increase where the current airport doesn’t have the capacity to handle. A need for a second international Airport had been a must for a long time, where it could be used for an emergency to land an aircraft. Since Sri Lanka did not have a second International Airport it was diverted to either Male or to India where additional amount of fuel had to be carried with an additional cost being incurred. Under the previous UNF government it was proposed to develop the second international airport at Wallawaya. After the dissolving of the parliament in 2004, and after PA coming into power it was decided to construct the airport at Weerawila in the Hambantota district. It was welcoming to see the laying of the foundation stone on the 19th of November, 2006 to celebrate the 61st Birthday of the President and the First Anniversary of the Presidentship of Mahinda Rajapakshe. I hope it will not be like other projects where only the opening ceremony takes place and afterwards no progress is made to implement the project to make it a reality. This momentous project will create new employment opportunities as well as promote tourism and attract industries to the province, thus providing a valuable boost to the local economy of the region. With the implementation of the Ruhunu Open Skies Policy, which offers a variety of aerial activities such as hang gliding, powered hang gliding, Para gliding, Para jumping, Sail Para flying, Ballooning, Float Plane operations and Micro and Ultra light flying will further enhance the tourism and leisure industry by providing an ideal opportunity for aviation enthusiasts to explore and experience the marvels of the open skies from Kaluthara to Arugam Bay in Batticoloa. Further the railway and the road network should be in a good condition. In 2002 the government led by Prime Minister Ranil Wickramasinghe drew up a plan of mega 64 projects which will benefit the country from north to south and from east to west, including major infrastructure projects. Some of them were the Norochcholai, Trincomalee Coal fire projects, Hambantota Port, Oil refinery and the highway connecting main cities like Trincomalee and Colombo which we could have attracted tourists and big investors invest in industries by setting up business plants in the region. Still the inner Colombo highway, Colombo – Matara highway and Colombo - Katunayake have not been completed due to various problems.

Recently Sri Lanka saw a paradigm shift in its political culture where both major parties came together to solve some of the critical national issues the country was facing. This was welcomed by most of the people in the business community and others in the civil society. As one of the key factors in the agreement between the UNP and the PA was the burning issue in the North East ethno-political crisis which is existing for the last two and half decades. The country can not afford to go on like this forever, there has to be some compromise wherever possible if we are to have peace in the country in order to go in the journey of development in all aspects including social development leading to sustainable economic development.

If peace is achieved Sri Lanka has the potential to attract tourists from many high spending countries that now doesn’t come to Sri Lanka due to the present crisis. To illustrate this point we could take Maldives for example, what do they have? They have the basic Sea, Sun & sand whereas we have more to promote. Sri Lanka’s rich culture and heritage, the mountains in the cool climate where one could travel just in a few hours, lovely beaches surrounding the island, etc. If not for the war in the North & East Sri Lanka too could be developed to attract tourists. I too visited Jaffna last September. We could adopt the same concept what the Maldives adopted, by having water bunglows and resorts adjoining the beaches in the North & East coastal belt. Further, we could promote water sports at these areas where many tourists prefer. Trincomalee is among the best of the places. It’s a beauty, the largest natural harbour, where even the biggest of containers could reach without any difficulty, if proper infrastructure is in place. We could convert Trincomalee into an economic zone by having the Oil tank farm, Cement factory, a Coal power station, and we could attract the Trincomalee harbour to get larger container vessels to operate, to handle both containers and cargo. Hambantota too situated at the southern tip of Sri Lanka at the point closest to the main East-West shipping route. If the proper infrastructure is in place with modern equipment and terminals it could compete with the Singapore, Dubai, Salalah, Port Klang and Tanjung Pelepas Ports by handling both cargo and containers. In the other end of the KKS harbour, the wrecks due to the war where navy gunboats have been sunk and large ships couldn’t approach since the wrecks are there. Now the goods have to be brought to shore by barges where it’s time consuming. Earlier the Dutch government gave grants to remove the wrecks away so that ships could reach the shores without any difficulty, but Indian authorities have interfered and said that they will take out the wrecks inside the harbour and construct the breakwater whereas the Dutch government gave support to take out wrecks both inside and outside and to construct the breakwater. The idea behind these scenarios is that India wanted to promote their ports by constructing the Vizhinjam port and by dredging the Sethsurendram channel which will affect the Sri Lankan Ports and by this action Sri Lanka will be in isolation in the international shipping. Vizhinjam port has a natural draught of 24m which could berth large vessels.
The Port of Colombo which has two operators both government and private the JCT (Jaya Container Terminal) and SAGT (South Asia Gateway Terminal) respectively will run out of capacity in the years to come with the ever increasing and growing shipping industry. If the Sri Lankan government doesn’t take any action to build the Colombo South Port it will definitely loose its Hub status and we will be merely a feeder port very soon. We urgently need the successful introduction of private investors to handle terminal operations in the port. The success of SAGT further proves the ability of Sri Lankan companies to add value to large scale infrastructure projects. So this paves the way for the private sector to get involved in the infrastructure development projects in the country. Also, these projects could be listed in the Colombo Share Market where private companies as well as the public could invest in the country’s development, whilst helping the government to find funds to implement these high cost infrastructure projects. Thereafter market capitalization would increase and foreign investors would get attracted to supply funds to our share market.

According to Mr.Rohan Masakorala’s article published on the November 6th Daily Mirror Financial Times, when going back in history, the Port of Colombo had to be ready for 8000+TEU ships by 1996. However it never materialized. Oluville was the next hub after Hambanthota where a beautiful book was released called the “National Ports and Shipping Policy of Sri Lanka” in 1997. During the same period of time, in theory on paper and on political platforms, Sri Lanka was building the highest number of ports in a single country, namely, Oluville, Hambanthota, Galle and Trincomalee, to handle various types of ships. While Colombo was neglected ignoring its paramount requirements and there by gradually taking away its status as one of the leading ports in the region while it was ranked the 21st port in the world in terms of volumes handled. Our thanks go to the courageous decision taken by the late Mr. Lalith Athulathmudhali who developed and increased the capacity of the Colombo Port to become the 21st from a rank of 134 in the seventies, but now the Colombo Port is ranked only 36th in the world.

Interestingly while we were building ports during the last decade or so in books and in theory, countries like Dubai, Oman, Malaysia and even India took the initiative to actively drive forward and build new ports which are very well established and are way ahead of Colombo in terms of technology and capacity. As a result Colombo is no more listed by international magazines on their top 30 ports. So where have we failed? Today the marine industry is managed by people who do not know the industry, for those who don’t know the marine hub I humbly request you to look at Singapore and Dubai and see what they offer as real hub ports to attract global players.
For all these to happen there should be peace and stability. Without peace and prosperity neither ships nor airlines will touch Sri Lanka. If it does happen the sky will be the limit for our country, where development will go beyond our horizons to the deep blue Indian Ocean.