By Zahara Zuhair
The government will fast-track the delayed development work on the East Container Terminal (ECT) of the Colombo port, Ports and Shipping Minister Mahinda Samarasinghe told an audience of logistics and transport professionals in Colombo, last Friday.
“It is a shame that we have wasted two years in not developing the East terminal. As you know the previous government went through a tender process and Cabinet approval was also received. It was a question of implementing it.
When this government came into power it was put on hold; we were not able to start the development that was needed so that the East Terminal could be made use of,” Samarasinghe told a panel discussion organized by the Chartered Institute of Logistics and Transport (CILT).
The first phase of the East Terminal kicked off in 2015. The total length of the East Terminal is 1200 metres. The construction of a 400-metre stretch of the terminal has already been completed.
Samarasinghe said Sri Lanka Ports Authority (SLPA) during these two years had lost approximately Rs.4 billion due to the delay in completing
“This is the money that could have been earned by the Ports Authority easily. This estimation was given to me by them.
I’m the minister responsible and as such I will always express my point of view. Finally it is up to the government and the Cabinet ministers to take a collective decision.
I have instructed the SLPA Chairman and the board to give thought to this and come up with a strategy giving priority for this development of the East Terminal,” he said.
The second deep water terminal in the Colombo port expansion project is the East Container Terminal. The terminal has been planned as a joint venture project with a shipping line or a private terminal operator with 51 percent of equity owned by the SLPA.
At present, Colombo Port has only one deep draft terminal, namely Colombo International Container Terminal (CICT), with a depth of 18 metres and capacity of 2.4 million TEUs.
Earlier, Ceylon Association of Shipping Agents (CASA) had voiced their concerns over the delay of the construction of the ECT, noting that it would result in investors and container volumes shifting to regional ports.
They also had stressed that if Sri Lanka is serious about maintaining its transshipment shipping hub status and expanding its position to be the regional maritime hub, it’s paramount to expedite the ECT project in a transparent manner.
H’tota port lease: National interest not compromised
Commenting on the Hambantota port, the minister said the government would go ahead with the partnership as planned with the China Merchants Port Holdings Company (CMPort), but without compromising the national interest.
“We have had several rounds of discussions with CMPort. Ports Authority Chairman Dissanayake also had several discussions. He has spent hours and hours in discussing the nitty-gritty’s of the agreement.
I consulted my colleagues including Minister Malik Samarawickrama and other ministers as well as the previous minister.
We are confident that we will be able to put in place an eventual agreement that will not compromise the national interest of the country,” the minister said. The Chinese company and the government have been in talks for several months on operating the Hambantota port through a public private partnership (PPP) arrangement. But no deal has been reached yet. The project has faced numerous legal and political obstacles.
“The laws and institutions of the country will be respected; security aspects will not be compromised and the Sri Lanka Ports Authority Act will not be amended to suit the particular situation. The draft will be shared with the President and the Prime Minister. President already has outlined his concerns. Once it is approved by the ministers in parliament, it will be signed. There will be transparency. It is facing a lot of controversy, so I want to place the agreement before the parliament, so it becomes a public document. The public will see what’s in the agreement; nothing is to be hidden,” Samarasinghe said. The Chinese-funded Hambantota port, according to the minister, so far hasn’t been able to stand on its own and continues to incur heavy losses despite its strategic location. The loans obtained for the development of the port are being serviced hundred percent by the SLPA. The final details of the PPP the government is planning with CMPort still remains sketchy. However, CMPort is expected to invest over a billion dollars for about 60 percent of the equity of the port on a long-term lease basis. The arrangement also includes a 15000-acre industrial park, which has come under heavy fire from the people, who may lose their ancestral lands due to the project. However, the government maintains that the majority of the land that will be utilized for the park would be state-owned land. “There are also downstream projects we have planned with this investment. There also will be investments coming for the industrial park area that we are going to set up,” Samarasinghe said.
Sri Lanka’s total debt to China stands at around US $ 8 billion.
Rebranding and marketing Colombo Port
Meanwhile, unfolding the country’s port sector future plans, the newly appointed SLPA Chairman Dr.Parakrama Dissanayake said that they have launched a programme to rebrand and market the Port of Colombo.
He said that they also have embarked on drafting a National Port Master Plan. He also said that they were looking at modernizing the SLPA-owned Jaya Container Terminal.
According to Dissanayake SLPA will be establishing a logistic corridor in collaboration with the Western Region Megapolis project.
He added they are planning to open a yacht marina in Galle and also would be developing the Trincomalee and Kankesanthurai ports. Further, they are looking at opening a cargo distribution centre at Bloemendhal Road.
Dissanayake said SLPA owns and operates seven ports in Sri Lanka but 90 percent of revenue comes from the Port of Colombo.
“Minister’s advice to me was never to take your eyes off the wall, and that’s the Port of Colombo,” he said. It was also noted that instructions had been given by the minister to initiate a national comprehensive maritime and logistic policy. The first draft of this document is expected to be out within three months.