Business Shipping

Financial agreements signed for Hambantota Port Project

During the official visit of President Mahinda Rajapaksa to China this year to commemorate the 50th anniversary of bilateral friendship between the People’s Republic of China and the Democratic Socialist Republic of Sri Lanka, special negotiations were held with the Chinese President His Excellency Hu Jintao to obtain financial assistance to construct Hambantota Harbour.

The Chinese Government agreed to provide 85 per cent of the expected cost of US$ 360 million for the construction of Hambantota Harbour, under a special loan scheme.

Signing of Financial Agreement for the Hambantota Port Development Project was held on the October 30 at the Temple Trees under the patronage of President Mahinda Rajapaksa.

The Financial Agreement was signed between Chairman of EXIM Bank of the People’s Republic of China Li Ruogu and the Sri Lankan Government. EXIM Bank provides financial assistance for the port project in Hambantota.

Minister of Port and Aviation Chamal Rajapaksa took immediate measures, directing supervision to expedite the Hambantota Port Construction Project. The Chairman of SLPA and the Board of Directors took special attention in the implementation of all necessary activities.

Accordingly, a number of steps were taken for the construction activities with the fullest contribution of the Vice Chairman of Sri Lanka Ports Authority, Priyath Bandu Wickramamunige.

A loan facility of Rs. 30,700 million had been enabled for the Hambantota Port Development Project. This loan facility had been granted to be paid back in 15 years with an interest rate of 0.9 per cent. This time period also includes a concessionary period of four years.

It has also been agreed by both the Sri Lankan Government and the EXIM Bank to arrange two years to re-pay six per cent of the loan in two instalments, to pay a fee of 0.3 per cent per year for the portion not utilised, and also to pay a management fee of 0.3 per cent from the total loan facility in one instalment.

After obtaining the Environmental Impact Assessment Report as well as the Assessment Report from the Rambol Institute, the initial construction works of the Hambantota Port Project commenced on June 07.

Hambantota International Port Project is scheduled to be accomplished in three phases.

The whole area of the project is 2,000 hectares. It will also be constructed using the latest technology and the final phase consists of 33 berths. It will also consist of breakwaters, a jetty for general cargo, fuel terminal for importing and transhipment of vehicles, essential building and service facilities, as well as super technical communication computer systems.

During the first phase of the Port Project, 43 hectares of land in ‘Karagam Lewaya’ will be dredged for the construction of three berthing facilities.

There will also be an approach channel with a depth of 16 metres and a turning circle of 600 metres. These constructions also include an industrial and service port with a jetty of 100 metres as well as a fuel terminal.

Facilities for the operation of general cargo, fertilizer, flour and vehicle vessels will be provided. Thirty nine months are expected for the phase one of the project and a time length of 15 years is expected to complete all construction works.

A highway system of six lanes is constructed inside the Port adhering to approval given by environmental organisations. Measures have been made to minimise environmental damage and also towards proper and secured waste management. Outside the Port, a 15-storied building will be constructed to facilitate the administrative needs of the Port and for the needs of Port-related institutions and banks.

Once the construction work of the Port is completed, it will provide 6,000 direct employment and 50,000 indirect employment opportunities.

Hambantota Port Project has been launched as a mega economic developmental project vital not only to Hambantota but also to the whole national development.

Hambantota Port Development Project has become a major landmark and a historical construction project in the history of the country’s construction process to elevate the national economy.

Priority for domestic shipping industry

The 2008 budget has given priority of the local and domestic shipping industry. The registration of a ship under Sri Lanka flag will not be considered important for custom purposes, thereby will be exempt from Customs duties and similarly be exempt from Port and Airport Development levy.

According to the budget proposals when a person transports his own goods in a Ship owned by him, a sum not exceeding 15 per cent of the value of such goods will be treated as freight charges for purpose of Custom Duty.

Sri Lanka being a small island, the international market for local products have been proposed to expand by increasing the number of ships owned by local ship merchants, further to the incentives offered in the last Budget to expand this business.

It is said that purchase of a ship to be registered under the Sri Lankan flag will be exempted from the Port and Airport Development Levy. It is also proposed that ships being registered under the Sri Lankan flag will not be considered as an import.

This will also boost the Sri Lankan shipping industry and it would help to develop a strong local shipping line for many local ship owners in the country and foreign shipping lines registered under the Sri Lankan flag. At present several domestic shipping lines are operating in the country. With this move, it will also improve the domestic and local shipping sector in the long run.

Fisheries protection vessel to be delivered two months ahead

CDL is scheduled to deliver the 40 m Fisheries Protection Vessel built for the Maldivian Coast Guard on November 10, two months ahead of schedule to the complete satisfaction of the owners.

This project has generated foreign revenue to Sri Lanka equivalent to nearly Rs. 480 million.

This Vessel shall be deployed to the Maldives Coast Guard for Patrol duties and high speed interception and protection of the exclusive economic zone of the Republic of Maldives.

The Vessel will have good sea keeping qualities, high manoeuvrability and stability and shall be capable of prolonged offshore operations. The novelty of this three engine Vessel design is that, the two outer engines drives two conventional propellers, while the centre engine drives a water jet.

The two propellers will be used to propel the speed at high speed during normal operations. During interception duties the vessels speed is boosted up with the water jet acting as a booster.

For loitering at low speeds only the water jet is used. This combination enables the vessel to be operated in the optimum mode, which will reduce fuel consumption of the vessel and lengthen the life span of the machinery and equipment onboard.

The complete design including the hull was developed by Sri Lankan Design Engineers and the model test for hull performance was carried out at the University of Peradeniya to fine tune the hull form.

CDL went one step further and arranged for a Design Review of the hull form and propulsion system by a well recognized design firm, Van Oossanen and Associates of Netherlands and also carried out a verification model testing at the Krylov Institute in Russia.

The test results proved that the hull forms to be one of the best hulls in this class of vessels.

This Vessel is built to prestigious Lloyd’s Classification Rules and carries the Class Notation LR +100 A1 SSC Patrol Mono G2 LMC. All major machinery and equipment fitted onboard are from world leaders in the manufacture of state of the art marine machinery and equipment.

This Vessel was secured by CDL pursuant to a comprehensive techno-commercial evaluation amongst many international contenders and are proud that the Maldivian defence authority’s absolute reliance placed on CDL, counting on CDL’s experience and competencies, in awarding this prestigious contract.

With more than three decades of shipbuilding experience, CDL has created a name for itself and Sri Lanka, building various types of customised vessels for the international markets and has been the forerunner in the Sri Lankan industrialization. “The Odyssey of Excellence continues...”