CATB approval this week:

RFPs for South Port Terminal I this month

Ravi LADDUWAHETTY

The ambitious and gigantic US$ 1.2 Colombo South Port project will kick off soon with the Cabinet Appointed Tender Board (CATB) expected to approve the tender this week.

The CATB has been through the Tender document for the last three months and they are expected to give the much-awaited nod this week.

The Attorney General has also approved the tender, Sri Lanka Ports Authority Chairman Dr. Priath Wickrama told Daily News Business yesterday.

By this move, the Government will also call for the Requests for Proposals in the third week of January”, the SLPA Chief said.

He also said the three terminals were expected to cost US $ 1.2 billion and that the Government strategy would be to construct the first two of the three terminals simultaneously where the first terminal would be constructed by the private sector on a Build Own and Transfer (BOT) basis.and transferred to the Government at the end of 30 years from the date of the launch. The capacity of the first terminal would be 2.5 million TEUs.

The second terminal would be constructed by the SLPA and both are expected to be completed in 2010 by which time the total capacity of the two terminals would be 3.1 million TEUs as the SLPA part of the project would be staggered. This will also mean that the total capacity of the Colombo Port will be 7.6 million TEUs at the end of 2012 with the existing 4.5 million capacities of the South Asia Gateway Terminal and the Jaye Container Terminal.

Dr. Wickrama who is also an International University of America- Doctorate in Philosophy in Port Management, said that the third terminal which was going to be constructed and operated by a private sector player will be deferred as the volumes might not be there and it will be proceeded only if they reach the requisite capacities.

“We have done a Year-on-Year growth calculation and based on that to reach that targeted capacity of eight million TEUs it might take us a further 10 years from the date of the launch of the first two terminals,” he said.

“We will call for tenders for the third terminal only when we reach eight million TEUs from the first two terminals”, he said.

Responding to a question based on the popular belief as to whether the proposed. Sethusamuduram Canal project was a drawback on future Sri Lankan port operations, he replied in the negative. He said that it was in fact an advantage.

The Indian Government is proceeding with the project and there is nothing that we can do to stop it.

The Sethu canal will also make the Indian shipping routes for the feeder cargo to and from Colombo closer. We have to make the best of this. Moreover, Sri Lanka is also closer to the major international shipping routes, he said.

He said that the South Port is to be a tremendous boost for local importers and exporters who would like to drastically slash their freight costs in the wake of the global crisis.