Colombo Port expansion to derive multiple benefits

Sanjeevi JAYASURIYA

The expansion of Colombo port capacity is aimed at helping exporters, importers and value added service providers with possible greater contribution for the GDP. The expansion project of the south harbour will more than double the capacity of the Port of Colombo in container handling services and will have a positive impact on the export/import and value adding service industry and also to the south Asian shippers at large with more efficient transhipment services and connectivity, Shippers’ Academy CEO, SEMA Consultant and former Board Director SLPA Rohan Masakorala told Daily News Business.

The shipping community believes that any manufacturing organization or a distribution/trading company will benefit, with the new development as it will add much needed capacity in both ship handling and cargo handling in Colombo by 2013, he said. The new port will allow terminal marketers at Colombo Port to offer better services, turnaround times and connectivity to ship owners and the port will be ready to handle the world’s largest ships which would not call on any other south Asian port on a direct caller.

Colombo was one of the least congested ports in ISC region, except for the south east monsoon period and with the new development of south harbour the monsoon too will not effect the Colombo Port, which means feeder operators too will increase turnaround times. It could increase volumes of transhipment from the regional catchment area making it more viable with greater economies of scale.

The south harbour should attract new services to Colombo and over the next five years, port could see a steady growth in business volume and would be a great asset to link China and India trade. These effects should help the domestic exporters and importers with greater capacity and economies of scale to get better freight services including rates and speed to export markets and connectivity to reach new markets.

Shipping sector’s current contribution of around 4-6% of GDP should double during the next five years if policy reform are accelerated along with the infrastructure. The SLPA should be transformed into a marketing/services led organization with further autonomy to decide on tariffs and services, so that clients could be given more incentives as business develops. At the same time the Port Authority too should make sure that they attract more private sector led value added investments and services and focus on uplifting service levels for SME businesses in Sri Lanka and the region, he said.

This has to be done through efficient logistics and LCL management services and consolidation services with partnership with the private sector.

“It is also advisable to take measures to increase Sri Lankan base load cargo volumes from the current 25:75 ratio against transhipment volume, if the country can achieve 30:70 over the next decade with the overall volume growth, it would help more direct callers to increase frequencies to the Port of Colombo. Whist there is competition and global and regional challenges, as a country we should make use of the infrastructure to take advantage of our natural location, it is best to start now when chips are down in the global environment, whilst Asia has a promising future growth,’ Masakorala said.