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By Channa Kasturisinghe

The special price package introduced by the Sri Lanka Ports Authority (SLPA) in a bid to increase the volumes handled at the Colombo Port has begun to pay off with the Port recording an unprecedented growth in transshipment volumes during the last five months.

Shipping and Port experts attribute this surge in volumes in the Colombo Port to the product-price competition prevailing between the Jaya Container Terminal (JCT), the largest container terminal in South Asia and SAGT.

According to the latest SLPA statistics, during January 2003, the Port of Colombo handled 107,700 transshipment containers, an increase of 23 percent as against the volumes handled in January 2002.

The total container throughput handled during January 2003 was 156,737, an increase of 20% as against the volumes handled in January 2002. In January, the Port handled 258 vessels, an increase of 12% as against the vessels handled in January 2002.

The port had also recorded an impressive growth in volume in December 2002, handling 102,613 transshipment containers, an increase of 24.7% as against the volumes handled in December 2001.

This increase in volume has been recorded at a time when allegations are being raised against the SLPA's move to do away with the common rebate scheme. Although SAGT had written to the Ceylon Association of Ships' Agents (CASA) calling for the restoration of the common rebate scheme the majority of the shipping sector feel that SAGT was in an undue advantage with a common rebate.

Since SAGT and the SLPA signed an agreement in 1999 there had been a common rebate scheme which meant that the two parties could not compete in pricing. This had adversely affected the growth of volume of containers handled in the Colombo Port. From 1999 to 2002 there had not been any significant growth and the Port on an average handled only 1.7 million TEUs annually.

"The SLPA Board of Directors should look at the growth of volume in the Colombo Port. Pricing is an important element in this regard. Therefore we unveiled a special pricing package five months ago. As a result of this special pricing package the transshipment volume recorded an unprecedented growth of 20 percent during the last five months," SLPA, Chairman, Parakrama Dissanayake told the Daily News yesterday.

He said although the Colombo Port was in an ideal location and provided an efficient service the lack of a competitive pricing structure has been a major obstacle.

The President of the Institute of Chartered Shipbrokers Maxwell de Silva said the shipping sector is of the view that there should be price competition rather than price fixing and this has been proved by the increasing volumes in the Port.

A shipping sector expert said it was timely that the Government set up a Port Terminal Regulatory Authority to look into competition and service deficiencies.

"SAGT and the SLPA in 1999 came into a certain agreement which ran into about a thousand pages which is still a top secret. It gave a lot of one sided benefits to SAGT. Although there are six berths belonging to the SLPA and only two belonging to SAGT the lion share went to the SAGT.

The entire volume had not divided between the two proportionately. A Regulatory Authority should also be in a position to review the agreement," he said.

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