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By Ravi Ladduwahetty

The total volumes handled by the Colombo Port for the period January to July 2002 was 991,657 TEUs ( Twenty foot Equivalent Units), down 7.5 percent from the 1,072,075 TEUs during the corresponding period a year ago, largely attributable to the War Risk Surcharge imposed by the London based insurance underwriters in the immediate aftermath of the July 24 LTTE attack on the Bandaranaike International Airport.

The volumes of the first seven months of 2002, considered as a percentage variation, is less 0.6 per cent from 998,052 in 1999 and less 2 percent from the 1,011,851 TEUs in 2000.

The transhipment volumes handled at the Colombo port for the first seven months of 2002 was 647,677 TEUs and compared as a percentage variation, was down 10.7 percent from the 725,534 TEUs in the corresponding period in 2001, down 1.3 percent from the 656,506 TEUs for the same period in 2000 and down 5.7 percent from the 686,686 TEUs for the same period in 1999.

It also transpired that the volumes handled by the Sri Lanka Ports Authority owned and managed by Jaye Container Terminal (JCT) are down by 21 percent from 862,898 TEUs to 682,895 TEUs between 2001 and 2002.

The SLPA 2002 volume of 682,985 TEUs, as a percentage variation from 2001, was 20.8 per cent less than the 862,898 TEUs handled in 2000, 19.3 percent less than the 846,269 TEUs in 2000 and 22.8 per cent less than the 885,074 TEUs in 1999.

On the contrary, volumes at South Asia Gateway Terminals (Pvt) Ltd, operators of the Queen Elizabeth Quay (QEQ) for the same period was up to 308,672 TEUs in 2002 from 209,181 TEUs, up by 47.6 percent. When taken as a percentage variation, the figures are up 86.4 per cent from the 165,586 TEUs in 2000 and 173.2 percent from the 112,978 in 1999. The reason for the 1999 figure being relatively low was due to the operations commencing only in October that year.

When January to July 2002 volumes are compared with the same period in 2000, the overall port volumes are down by 2%. while the JCT volumes are less by 20 percent SAGT volumes are UP by 86%.

Transhipment Throughput/ Volumes January to July 2002 indicate that a total of 647,677 TEUs comprising JCT- 455,371 TEUs and SAGT- 192,913 TEUs. January to July 2001 volumes comprises a total volume of 725,534 TEUs will JCT - 573,612 TEUs and SAGT: 151,926 TEUs. The January to July 2000 volumes total was 656,506 TEUs comprising JCT: 538,457 TEUs and SAGT- 138,252. The January to July 1999 figures are a total of 686,686 TEUs comprising JCT: 690,586 TEUs and SAGT/- 72,256 ( October to December)

The highlights on the transhipment volumes are that the SLPA / JCT transhipment volumes for seven months January to July 2002 are down by 21 per cent compared to 2001 January to July. For the same period the total transhipment volumes in the port of Colombo are down 11% while the SAGT transhipment volumes for the same period are up by 27%.

When January to July 2002 transhipment volumes are compared with the same period in 2000, SLPA / JCT transhipment volumes are down by 15% and overall port transhipment volumes are down by 1.3%.The SAGT transhipment volumes are up by 40%.

When January to July 2002 transhipment volumes are compared with the same period in 1999, SLPA / JCT transhipment volumes are down by 34% port transhipment volumes are down by 6% while SAGT transhipment volumes are up by 167% Port transhipment volumes for year to date 2002 are down 6 percent as a percentage variation from 1999.

Sri Lanka Ports Authority Chairman Parakrama Dissanayake told the Daily News that the reason for the downfall of the cargo volumes handled in the Colombo port for the first seven months of 2002 was the war risk surcharge and ships not calling Colombo as Sri Lanka was declared "held cover status."

When asked why the volumes for 1999 and 2000 were also relatively low, he attributed the low performances to the withdrawal of the biggest client of the Colombo port at that time-Maersk Sealand shifting to its own port in Salalah.

He said that it was tragic that the Colombo port, which was well set for recovery in the second half of 2001, had to be debilitated by the War Risk Surcharge.

He said that the transhipment volumes handled by the Colombo port is well expected to grow in the first half of next year with the increased Indian volumes arriving in Colombo (which is the catchment traffic) to be shipped to the West parallel with the revival of the US and the European economies.

South Asia Gateway Terminals (Pvt) Ltd's outgoing Chief Executive Officer John Buckley, who will be taking up an appointment with P& O Ports in Manila at the end of the month, attributed the growth in volumes due to the world class operation.

He said that SAGT has achieved significant growth and has taken volume from the SLPA because SAGT offers world class levels of service to shipping lines despite charging a higher tariff. He said that all Colombo Port's regional competitors had significant growth over the last few years, unlike Colombo which had no significant growth for several years because the port operations and services were inefficient. He attributed the lack of efficiency as the principle drawback to the loss of growth in the Colombo port.

" The Port cannot compete with the service levels of competitor ports in the region. Until the port is restructured along the lines of other modern efficient ports there should be no expectation that growth of significance will return to the Port of Colombo," he said.

Commenting on the port tariffs, he said:" The strategy of the SLPA in reducing the port tariffs to boost volumes will only lead to a massive decrease in revenue to the SLPA / Government of Sri Lanka. This strategy will not provide significant growth to this port. The results achieved by SAGT are a clear sign that there is not a need to reduce the tariff to get shipping line business." Asked what the solution was, he said:" only the full restructuring and modernisation of all port operations and services will bring growth of significance back to the Port of Colombo. With this restructuring and modernisation must come the development of the South Harbour lead by experts in port development"

Responding to these comments, Dissanayake countered the argument by saying that the efficiency of the port has increased by 100 percent, but conceded that the Colombo prices were not competitive. He cited the example of the main user of the Colombo port- Zingo Star, despite acknowledging in writing that the efficiencies of the Colombo port had increased, that it was pulling out from Colombo and relocating its business in the Port of Kelang in Malaysia, whose port charges were 50 percent cheaper.

He said that the only method of making Colombo cheaper and internationally competitive would be to implement the Voluntary Retirement Scheme (VRS) which would result in the port overheads reducing to make Colombo more competitive as a transhipment hub.

Commenting in his capacity as the Chairman of the Jaye Container Terminal (JCT), Dissanayake said that despite the growth in the SAGT throughput volumes, it was so not because P& O or SAGT had generated new business, but because SAGT had drawn into the clients of the JCT.

Buckley countered this by saying that the clients were coming to SAGT because the services that it offered were very much better than the higher tariffs.

Dissanayake said that it was the SAGT which reduced the rates from US$ 40 per container to US$ 37, but it was the SLPA which increased their charges per container from US$ 35.65 US$ 37. However, Buckley countered this by saying that the reduction was effective September but all SAGT clients came to them at the old rate due to their superior charges.

He said that his rate was US$ 4 more per container than the JCT and that quality of the service, was the reason why the multinational procured more business.

Dissanayake also said that he would not allow SAGT to lead him and the port in the larger national interests. Shipping circles are also agog with the prospects of the multinational P&O Group which have shipping and ports interests in Mumbai ( the Nava Shiva Port- JNPT) and Chennai and the multinational attempting to these two ports their regional hubs as SAGT has a capacity is restricted to only a million TEUs.

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Copyright 2001 The Associated Newspapers of Ceylon Ltd.
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