Port sector targets US $ 5 b

Shirajiv Sirimane

The Colombo and the Magam Ruhunupura Mahinda Rajapaksa Port in Hambantota will attract over US $ five billion investments through the private sector by 2015. Over US $ three billion has been invested in the port sector through funds from Asian Development Bank, People’s Republic of China, India, Denmark and Japan. “Other than this, private sector organizations from various countries has committed to invest total of US$ 2.2 billion in areas of manufacturing, assembling, warehousing, handling and many more sectors,” said Sri Lanka Ports Authority Chairman Dr Priyath B Wickrama.

Delivering the keynote address at the Annual Conference of the Middle-East Money and Ships 2011 at Dubai Marina on Sunday on ‘Global trading pattern has now changed the emerging production chain in Asia’ he said that they have already received offers worth of US $ 1.2 billion to invest in the Port of Colombo and around US $ one billion at the Hambantota Port. It has been estimated that distribution of Asian container volumes will be 55% from East Asia, 18% from South East Asia , 14% from North Asia, 9% from South Asia and 4% from West Asia including the Middle East.

It has also been projected that Indian container traffic will increase from 10.7 million TEUs in 2010 to 75.8 million TEUs in 2025 according to the JNP business plan.

The global trading pattern has now changed the emerging production chain in Asia particularly in China and in India. This change has been experienced due to among other things low labour cost in production of manufacturing goods. Due to large quantities of production, China and India have been able to maintain economies of scale. These two countries have developed higher labour productivity, cost efficiencies and production efficiencies to maintain competitive cost of production. Asian countries particularly China and India have adequate resources of raw materials.

They have managed their economies to generate excesses in production for exports in addition to local consumption.

Another trend which has been observed is outsourcing certain services in supply chain management to experts to achieve benefits of specialization. When making Asia the important economic centre of the world, it is absolutely necessary to strengthen the logistic chain and to make it simple.

The Colombo South Harbour is being developed under the Port Development Project and the second and third phases of the Colombo Port Development Project will enhance the total capacity upto 13 million TEUs with 2.4 million TEU capacity with each terminal.

Construction work of the Phase II of the Mahinda Rajapaksa Port has almost started and under this phase, it is expected to deepen the channel up to 17 million and to add six more berths including a container terminal.

“Sri Lanka’s vision for tomorrow has envisaged transforming Sri Lanka as an energy hub and exploration work is underway for oil and gas in Sri Lanka and have already found gas.

All important sectors of the country are using IT facilities and such applications have created more efficiency in services,” Wickrama said.