Poised to take off as new maritime hub in the South

“If the vagaries of wind and wave first brought the Portuguese to Ceylon, the lure of cinnamon kept them in the Island” - Dr. Colvin R de Silva (Ceylon under the British Occupation – Vol. 1)

While the lure for cinnamon made the Portuguese blown here stay and rule over the entire maritime provinces of this island for nearly 150 years, as Dr. Colvin R de Silva, freedom-fighter, historian, Marxist, lawyer and politician says; the vagaries of wind and wave, combined with the island’s position in the Silk Route of the ocean, and more importantly the lure of its gems, spices, elephants and peacocks and the teachings of Buddhism, brought traders and travellers to Sri Lanka for many centuries prior to this initial contact with trading companies of the West, and the imperialism that was to follow.

If Sri Lanka’s strategic location in the trade routes of the Indian Ocean trade was important in the past, going back to the times when envoys were sent from this country to Rome in the West and China in the East, its location is now gaining increased importance as the country seeks to expand trade and commerce with rapidly growing world markets, in an increasingly interconnected world.

This importance was well seen at the 'Sri Lanka - Ports, Trade and Logistics Conference and Exhibition' held in Colombo earlier this week. Jointly organized by the Sri Lanka Ports Authority (SLPA) and Seatrade Communications Ltd. of the UK - with a worldwide reach in ports and shipping activities, it was an event that combined both exposition of Sri Lanka’s marine related capabilities and an opportunity for a deep study of the strategies, goals, realities, expectations and challenges in the Ports Sector of the economy.

In his opening presentation on the 'Requirement of an Efficient Integrated Communications System to convert Sri Lanka to a real Maritime Hub' the chairman of the SLPA Dr. Priyath Wickrama showed the importance of an effective and integrated communication system with stakeholders within the country, in the region, and in the global maritime industry, to develop Sri Lanka as a maritime hub.

Key sectors of development

The developing of Sri Lanka to be a hub in the five key sectors of development - aviation, marine, trade and commerce, power and energy, and knowledge - is an oft repeated statement today, being at the core of the 'Mahinda Chinthana – Vision for the Future'. What took place at this conference and exhibition was the most expansive presentation of the possibilities of and opportunities for developing the Marine Hub in South Asia, which hold much promise of being a key shipping centre in the Indian Ocean Region.

Dr. Wickrema showed how, Sri Lanka has taken steps to harness the potential offered through the advantage of location to develop into a key maritime and logistics centre in the region. It was a careful tour of how the government is realizing the necessity of direct contribution by the sea ports, port services and the shipping business for further improvements in transport services to promote trade and other improvements of the country’s economy.

Showing how the development of sea ports would help make available regular and frequent shipping services to the country to enhance import and export trade, and serve the South Asian region and international trade in general, he also showed how Sri Lanka’s sea ports could contribute to the transshipment business, particularly in the Indian subcontinent by rendering efficient and cost effective services to the increased shipping lines calling over in Colombo, and showing an interest in other locations in Sri Lanka.

He emphasized the Colombo Port Expansion Project launched to increase container transshipment capabilities. With the completion of three terminals it is expected to increase the capacity of Colombo port up to 13 million TER to cater to the increasing demand of services in the international shipping industry.

Very revealing and most interesting was the announcement of planning already under way to add 230 ha approx of water front with the shelter of a new breakwater to be reclaimed in Colombo, at a cost of approximately US$ 900 million. This area is to be developed as a port city with proper planning to equip it with roads, water, electricity, communication facilities, shopping areas, water sports area, a mini-golf course, hotels, apartments, recreation areas, marinas etc. in a fully modern city, built in keeping with the latest trends and needs of planning, drawing from the examples of other such developments in Asia and the increased demand for a new era of urban progress.

Participants from different specialties in the shipping sector from Sri Lanka and abroad, both private and public sectors, were all agreed that the Port of Colombo had indeed developed as a major transshipment centre in this region, with success seen not only in the number of container vessels handled but also in the speed of turnaround and the many new facilities available to shippers. In the view of many seasoned maritime personnel from leading shipping and marine servicing companies abroad, this held much promise for Colombo to be an important transshipment hub in all Asia.

North to South

Among the most important observations at this conference came from Noburu Ueda, chairman and President of ClassNK, Japan, one of the biggest shipping companies in the world, who explained the significant changes taking place in shipbuilding, servicing and management in the world. He showed how shipbuilding that was dominated for centuries by the West had shifted to the East after World War 2, with the growing importance of Japan, Singapore and China. He also explained another key shift - from North to South, in ship building, ownership and management, and saw all signs of Sri Lanka having the opportunity to emerge as shipping centre in the South, similar to Singapore and Dubai, that are the most influential in the region at present. With her prime location, Sri Lanka’s opportunities were not confined to transshipment and support services, but also extended to shipbuilding he said, with considerable confidence in the maritime future of the country.

If assurances were needed to foreign investors, who are already showing much interest in the marine and related sectors, the chairman SLPA explained how government policy, where the ports come under the purview of President Mahinda Rajapaksa himself, is to keep abreast of the latest advances in information technology so as to ensure that trade facilitation and cargo movement through ships and the port to other modes of transport occur efficiently and rapidly, thus helping in global door to door services in the most efficient and secure manner. It is the recognition of the enormous contribution made to the economy by the Ports and Shipping and related industries, that the President has assigned priority and importance towards expeditious development of necessary infrastructure and service requirements to this sector.

Magam Ruhunupura

The conference organizers made a very balanced shift of focus to the new Hambantota Port, which Dr. Wickrema’s presentation and other specialized observations confirmed as being able to provide world class infrastructure for manufacturing with more sophisticated facilities as well as cargo projects. The Port functions as a service and logistics hub with free port facilities and as a sea-air hub with excellent rail and road connectivity to serve as a One-Stop-Shop for investors and port users.

Phase I of the Hambantota Port development project inaugurated in November 2010 with an available depth of 17 metres and a turning basin of 600 metres and two general cargo berths with two oil and gas terminals for bunkering and ship supplies providing investment opportunities for local and foreign investors. Phase II of the port project is now being constructed.

There was much enthusiasm among the foreign participants on the new developments in Hambantota, especially in view of its location very close to the shipping routes from the East to the West which is the busiest shipping lane in the world. There was noticeable confidence shared by the SLPA and the foreign operators that the Hambantota Port will serve as the naval and logistics hub in South Asia serving the international community in an efficient and productive manner.

If Colombo was endorsed for its record of success already achieved, there were clear positive expectations, matched with serious inquiries on investment prospects, on the future viability and success of Hambantota, which was seen as an important centre of port-based development, with an overall view of positive growth due to the proximity of the Mattala International Airport being built, the Free Trade Zone nearby, and the many facilities for bunkering, servicing, good road connections to other parts of the island, and the expected extension of the railway from Matara to Hambantota.

At an interesting panel discussion on “Furthering supply chain management – Free Trade Zone development and logistics in Sri Lanka”, the input from both Sri Lankan and foreign participants recognized the importance of good supply chain management, with clear indications of the very good possibility of Hambantota being a location that would be soon be looked at with increased interest by Indian shippers, due to the rapid growth of the economy across the Palk Strait and the constraints of growth in the Indian port sector.

Responding to a question as to the feasibility of the Free Trade Zone at Hambantota, as an investment and employment generation move, in comparison to the absence of such port related development zones in both China and India, Dr. Wickrema explained how the situation in both China and India differed very much from Sri Lanka, in that both those growing economies had large internal markets, whereas, Sri Lanka, due to its size and population had of necessity to look for foreign markets.

The Chair of the panel discussion Capt. Nihal Keppitipola, Managing Director of SLPA, summed up the importance of Hambantota very well by stating that the strategy for success was based on “location, location, and location” emphasizing the strategic location of Sri Lanka, that is the focus of the maritime growth in the country. He also showed the necessity of having alternatives to Colombo, in the event that its current importance for transshipment begins to decline.

The Conference participants were informed of the development strategies for the ports of Galle, Trincomalee and Kankesanturai, which would make Sri Lanka capable of fully utilizing her situation as an island and strategic location both for international trade and commerce, as well as greater connectivity within Sri Lanka. There were different activities being focused in each port with tourism getting priority at Galle, eco-tourism and finished products at Trincomalee and KKS benefitting from development in the North and being the closest to India.

The Conference highlighted the Government’s clear emphasis on the port and maritime sector development, being a key part of the overall strategy of development of President Mahinda Rajapaksa, who saw the benefits from a combination of strategic location and modern technological progress moving together, both during the armed conflict and new in the new conditions of peace.

There was overall endorsement by the large number foreign participants that judging from the developments seen in the port sector alone, Sri Lanka was poised to take off , with genuine expectations for strategic investment from the high growth economies of Asia – India and China – that will propel Sri Lanka into an important India Ocean economy.

The discussions, showed that geographically and geo-politically, Sri Lanka is very well placed, located next to the fast growing Indian economy with development focused on increased exports, and having very good relations with Sri Lanka; and China, that sees Sri Lanka as a strategic hub for expansion in trade and commerce in Africa, the Middle East and beyond.

The monitoring of wind and wave, use of new technology, the emerging skills within the country and the free and open policies on investment all have promise of making Sri Lanka the new hub in the Southern seaways of the world, between Singapore and Dubai.