Colombo eyes largest port status in Indian Ocean

By Chandeepa Wettasinghe
The Colombo Port could end up sprawling up to Ja-Ela, over 10 kilometres away from Colombo’s city limits, under the North Harbour project to make the Sri Lankan capital the largest port in the Indian Ocean, Prime Minister Ranil Wickremesinghe buoyantly said yesterday.

“If we can develop the North Harbour, all the way up to Ja-Ela, it will make Colombo the largest port in the Indian Ocean for the next 50 to 100 years,” he said yesterday at a keel-laying ceremony at Colombo Dockyards PLC, which is controlled by Japan’s Onomichi Dockyards.

According to the prime minister, Japan’s help will be sought in conducting feasibility studies for the North Harbour.

“We can surpass Singapore and become the largest port between Iran and Australia,” Wickremesinghe added, noting that Colombo would then dominate the regional supply chains. Sri Lanka however has a long way to go before competing with the top dog Singapore, which will have a container handling capacity of 50 million twenty-foot equivalent units (TEUs) by end-2017. Colombo, which is the only container port in Sri Lanka, has a capacity of 7.1 million TEUs.

Singapore handled 30.9 million TEUs in 2016, which was the same as 2015, but down from 33.9 million TEUs in 2014.

Some, such as Colombo International Container Terminal (CICT) Chief Business Development Officer Tissa Wickramasinghe, had partly attributed this fall in Singapore’s throughput in 2015 to CICT, which opened in Colombo in late 2013 and hit its stride in 2015 and has according to him, been stealing some of Singapore’s business.

The Colombo Port handled 5.74 million TEUs in 2016, up from 5.19 million in 2015. Prior to the opening of CICT, Colombo had handled 4.19 million TEUs, back in 2012.

Two other terminals, tentatively named the East and West Container Terminals, identical in capacity to CICT, will be constructed in the South Harbour, where CICT is the current sole occupant, and push the port’s capacity to over 12 million TEUs over the medium term.

The pace of development has however been slow, since the parties that submitted expressions of interest to build and operate the East Container Terminal have been waiting for a long time to hear the results of the process and the Asian Development Bank, which was advising on the project, said that it was thinking of exiting it due to delays.

The port developments also have to take into account geopolitical sensitivities, such as China being given CICT and the Hambantota port to be developed as an industrial port under China’s One Belt, One Road Initiative, which prompted the then Ports and Shipping Minister Arjuna Ranatunga to ask submissions for the East Container Terminal to be made in concert with Indian firms.

However, the prime minister should justify the environmental cost of this proposed port expansion since he had halted the Chinese-constructed Colombo Port City—of minute scope compared to his ambitious plan unveiled yesterday—for nearly two years, purportedly over environmental concerns.
These raise questions on when—if the prime minister’s dreams of expansion do commence—such a project will be completed, since extending the port to Ja-Ela would more than triple the shoreline the port currently occupies.

Even plans in the government’s flagship project, the Western Province Megapolis Project, is forecasting demand for Colombo being 12 million TEUs by 2030 and 19 million TEUs by 2040, under a North Harbour project, which expands the port just to the edge of the city limit in Mutwal.

However, even the Megapolis Project has run into delays due to difficulty in sourcing land from private owners to plan the development.

The port could handle up to 35 million containers by expanding up to Mutwal, according to government data.

Wickremesinghe said that there would be a much higher need for capacity in Colombo due to the Indian Ocean region being the fastest growing region in the world and Sri Lanka building greater trade relationships with global economies.

He said that as a first step, Colombo’s share of Indian entrepot trade could be increased from 60 percent to 75 percent, despite India developing its own ports. “If we can’t take the advantage of our geographical location, there’s no use,” he said and added that ports should also be developed in the North, while the Trincomalee Harbour should also be developed.