Shipping

Colombo Port records 9.5 percent growth

The Services sector which accounts for a share of 59.5 percent of GDP, grew by 5.6 percent during 2008 compared to the growth of 7.1 percent in the previous year. The contribution of the Services sector to the overall growth in GDP also fell by about 6 percentage points to 56.6 percent.

This slowdown mainly stemmed from the deceleration in export trade, transport and financial services activities, particularly in the second half of the year with the onset of the global economic slowdown. Transport and communication sector recorded a growth of 8.1 percent, compared to 10.5 percent in the previous year.

As in the previous year, this sub-sector achieved the highest growth in the Services sector with positive contributions from all three sub-sectors, namely, transport, cargo handling, ports and civil aviation, and post and telecommunication.

The cargo handling, ports and civil aviation sub-sector recorded a growth of 8.0 percent, compared with the growth of 8.8 percent in 2007. The slower growth was mainly due to the contraction of international trade activities. The Colombo Port, including the South Asia Gateway Terminal (SAGT), handled a volume of 3.69 million Twenty-foot Equivalent Units (TEUs) and recorded a growth of 9.1 percent.

Transshipment volumes increased by 11.5 percent, as against the 10.6 percent increase in the previous year.

Improvements in efficiency at terminals contributed towards the growth despite the slowdown of international trade activities during the latter part of the year. During the year, air cargo volumes

contracted by 10.6 percent. The transport sub-sector grew by 6.3 percent over the growth of 9.3 percent in the previous year. The slowdown was reflected in railway, and passenger and goods transport sectors recording lower growth rates of 4.7 percent and 6.4 percent, respectively, compared to 5.8 percent and 9.4 percent in 2007.

The slowdown in the transport sector reflected in the drop of fuel consumption associated with high fuel prices that prevailed during the year.

The air travel sub-sector contracted with the total passenger kilometers flown by Sri Lankan Airlines recording a contraction of 6.8 percent.

The growth momentum in port services continued in 2008 despite some impact from slowdown in global trade during the latter part of the year. Total cargo handling grew by 9.1 percent to 50.6 million metric tons in 2008 compared to 8.6 percent growth in 2007.

Total container handling also increased by 9.1 percent to 3.7 million Twenty foot Equivalent container Units (TEUs) and transshipment handling increased by 11.5 percent recording the highest ever container throughput at the Colombo port. The Colombo port which had been ranked 30th in terms of container handling has been advanced to 27th place in 2008.

Several measures have been taken to improve productivity in port services at the Jaye Container Terminal in 2008. The installation of new terminal handling equipment, introduction of a new computer based terminal management system, and implementing measures to increase the supervision so as to maximize the utilization of existing resources were among them.

Further measures are being taken to reduce non-operational time of the port by reducing the time taken for shift breaks. The global economic slowdown and the resultant reduction in world trade could have a significant impact on port services in 2009.

Port services which were growing significantly during the first nine months of the year, suffered a set-back during the last quarter.

The growth of container handling, transshipment handling and cargo handling decelerated significantly during the fourth quarter of 2008 and this trend would continue in 2009 with the prolonged global economic recession.

Shipping lines also face difficulties due to lower trade volumes and would probably be compelled to reduce costs, especially at transshipment ports and may attempt to re-negotiate existing terminal services agreements with ports and terminal operators.

Several major port development projects were in progress in 2008. The construction work of the Colombo Port Expansion Project (CPEP) has been given priority as capacity limitations at the port could lead to a loss of its market share in transshipment.

The CPEP includes dredging, construction of a breakwater sufficient to accommodate three terminals, establishment of a new marine operation centre and relocation of oil pipe line.

It is planned to construct these terminals on a Build Operate and Transfer basis (BOT). Dredging and the construction of the breakwater have started, while bids have been called for the construction of terminals. The first terminal in the new port is expected to be operational by 2012 adding capacity to handle 2.4 million TEUs. Total capacity of the new port would be 11.7 million TEUs. The construction work of the Hambantota Port Development Project started in January, 2008 and the construction of the cofferdam was completed while approximately half the construction of the breakwater has been completed in 2008.

About 99% of the initially identified lands for the Hambantota Port Development Project have already been acquired. The construction work of the Oluvil Port Project including site preparations, road works and other utilities were in progress.

Technical and financial evaluation of the Galle Port Development Project was completed in 2008, while bids have been called to find a suitable developer.

Sri Lanka has potential for growth - SLFFA Chief

Sanjeevi JAYASURIYA

The industry is today facing a difficult time due to the world economic downturn. We need to develop our strengths to overcome these challenges. We are optimistic of a better future. 'Every dark cloud has a silver lining', said the newly elected President of the Sri Lanka Freight Forwarders' Association (SLFFA) Tony De Livera at the Association's 28th AGM in Colombo.

He said "It is important to look around for opportunities. We have a great potential for growth as a country free of terrorism. We have held discussions for the removal of the war risk surcharge and this will be a boost for the industry."

"To ensure industry development it is necessary to open air routes, increase coastal activities, develop the fisheries industry and infrastructure development. The Government and the private sector should get together in decision making and a clear vision is essential," he said.

Sri Lanka is in a position to become a regional logistic hub. It has the potential to capitalise on this. We need to add new value to our services, he said.

The SLFFA is a member of the International Federation of Freight Forwarders Associations.

Maritime expert conducts training programs

The International Maritime Organization (IMO) on Flag State Implementation, Maritime education and Flag State Auditing, recently conducted a regional training program for the Asian region at JICA International Centre in Yokohama, Japan.

Twenty-one participants from 17 countries including Sri Lanka, Japan, Singapore, India, China, Malaysia, Bangladesh, Myanmar. Korea and Hong Kong attended the five-day training program on auditing of maritime administrations.

A marine engineer by profession and the former Technical Manager of the Ceylon Shipping Corporation (CSC) Leslie Hemachandra, a product of the Colombo Port Commission (CPC), first joined CSC in 1973 as a junior engineer of M/s. Lanka Devi.

He conducted five regional training programs for officials of various Maritime Administrations on Member State Auditing and has trained about 80 auditors worldwide. He trained about 50 officials on Flag State Implementation and carried out several need assessments on Maritime Education and Training and Maritime Administrations.

He conducted Member State Audits of six countries including the US to ascertain whether these countries are in compliance with the International Maritime Conventions and Treaties applicable.

He is a member of the panel of Competent Persons for IMO evaluating information on Maritime education provided by various countries in respect of STCW convention.

He will conduct a member State auditor training program in South Africa and to lead an audit of a major shipping nation under the Flag State audit program on behalf of the IMO in the near future.