ECT delay a deterrent to export-led growth: expert

• Says country’s ports well located but lack capacity
• Huang points out non-availability of int’l trade centre or distribution centre to support ports
• Notes approximately 70% of activity at Colombo Port confined to just transshipment 

By Shabiya Ali Ahlam

Sri Lanka has been striving to embark on an export-led growth model, but this aspiration is challenged given the prolonged delay in the development of Colombo Port’s East Container Terminal (ECT) and manner in which the ports are functioning, key factors that are limiting the trading capacity according to a top logistics expert.

With the country’s international trade volumes continuing to remain at below expected levels, Colombo International Container Terminals CEO Jack Huang pointed out that despite the ports, both Colombo and Hambantota, being strategically located, the  full potential is yet to be realized as lack of capacity is one of the key issues that need to be acknowledged and rectified. 

“If you look at the ports, they are very well located. But can we do more? There are many issues and one is the lack of capacity. The East Container Terminal has been delayed for almost five years and the operators are faced with lack of capacity,” expressed Huang at a round table discussion facilitated by the Oxford Business Group (OBG) and First Capital in Colombo recently.

While the ECT’s first phase reached completion in 2015 with a US$ 80 million loan from State bank, Bank of Ceylon (BOC), the delay continues with President Maithripala Sirisena opposing any move to develop the terminal by the private sector or through a Public Private Partnership (PPP).In June, Japan extended a loan of US$ 500 million to complete the second phase of the facility, which includes an 800m berth. A MoC was signed in May between Japan, India, and Sri Lanka affirming that Sri Lanka will hold full ownership of the terminal with operations being carried out by a joint venture company.

Huang also pointed out that crippling the chances of a proper export-led growth is the lack of partner facility support. Elaborating on the statement, he stressed that unlike Hong Kong and Singapore, which have a well-developed partner facility, Sri Lanka does not have an international trade centre and an international distribution centre working together to 
support the ports.

 “The port cannot run by itself,” he stressed.

Furthermore, Huang opined that the current state of the Colombo port is “sad”, and much of the activity is only transshipment, approximately 70 percent. 

“There are lots of cargo coming from India and Far East to do transshipment, and they only do transshipment and nothing else. They are just passing by, there is no international trading with the country itself,” he stressed pointing out missed opportunities.