A top Sri Lanka Ports Authority (SLPA) official recently appealed to the detractors of the state institution to recognize the sacrifices it is making to create a level playing field for the private sector while delivering a positive performance.
SLPA Managing Director, Sarathkumara Premachandra, speaking at the SLANA Annual General Meeting last week said, numerous stakeholders are criticizing SLPA for not achieving greater profitability and its Jaya Container Terminal (JCT) for losing competitiveness.
“JCT earned 60 percent of SLPA’s gross revenue in 2016. So protecting JCT is of paramount importance to SLPA, but on the other hand as the mother organization and as the common service provider SLPA has to maintain a level playing field for all operators,” he said.
He noted how JCT has old equipment—maintained admirably—well past their replacement dates, while it has shallower berthing depths than the private sector terminals, which were created through loopholes in the Ports Authority Act.
Premachandra opined that SLPA facilitating these terminals without bias caused it to become a victim of its own success.“There are accusations on SLPA losing ground on private terminals. Those who make these allegations do not know or choose to ignore that it was SLPA that facilitated these investments,”
SLPA chose to develop the Colombo South Harbour despite knowing that it would become the star, according to Premachandra.
“The result was Colombo achieving a 10.6 percent growth handling over half a million TEUs over the previous year. The trend continues today, achieving over 6 percent growth. Shouldn’t SLPA share this glory? Was it better for SLPA to not build the new harbour to avoid loss of some TEUs in the short-term? These are the questions we would like to ask from critics,” he said.
He pointed out that SLPA had sacrificed an opportunity to upgrade JCT with cutting edge technology but instead chose to develop the proposed East Terminal to handle extra traffic when the new 2.4 million 20-ft equivalent unit (TEU) capacity Colombo International Container Terminal (CICT) reached full saturation. “When the Asian Development Bank wanted to give a grant, we didn’t ask for the refurbishment of JCT. We asked for a national ports master plan, because we saw the need for it,” he further said.
He also noted that until the Colombo South Harbour, which hosts CICT and the proposed West and East Container Terminals, reaches breakeven, SLPA will subsidize its services making these terminals attractive to investors and initial customers. SLPA also provides services free of charge to all government institutions, while also having to provide secure employment for over 9,000 in order to maintain multiple ports and harbours and other state maritime assets, which is not a fair comparison with a single terminal operator with a handful of employees and a host of unsecure manpower workers, Premachandra added.
Around 8,850 of the 9,650 SLPA employees work in the Colombo Port.
Premachandra claimed that critics are complaining about JCT’s lack of efficiency despite efficiency measures undertaken within the state sector, compared to the flexible strategies of the private sector, which SLPA empowers. SLPA made a pre-tax profit of Rs.1 billion in 2016 against a Rs.14 billion loss in 2015. It recorded a revenue of Rs.43 billion despite losing over 100,000 TEUs to the private sector compared to 2015, when it reported a revenue of Rs.40 billion. Operating expenses fell 8 percent to Rs.28.66 billion in 2016. Royalties from the private terminals amounted to Rs.2 billion in 2016. Premachandra said that the Trincomalee Harbour made a profit last year after two decades as well, and that all ports except Hambantota made profits during the year.
In 2016, Hambantota posted a pre-tax loss of Rs.10.9 billion down from a Rs. 18.8 billion loss in 2015. Premachandra claimed that SLPA’s facilitation of the maritime sector should be commended.
“Since 1982, the (Colombo) port has come a long way, from a feeder port for Singapore without even a proper container terminal or container trains. It has transformed itself to a hub that can cater to any container ship that sails the high seas. It has rated 23rd among the world’s container ports,” he said.(CW)