Sri Lanka aims to be global maritime and logistics hub
SRI Lanka has set its sights on becoming a global maritime and logistics centre on a par with Dubai and Singapore given its advantageous geographic location in South Asia
SRI Lanka has set its sights on becoming a global maritime and logistics centre on a par with Dubai and Singapore given its advantageous geographic location in South Asia.
'We're in the middle of the Indian Ocean, with these two hubs almost equally either side. Sri Lanka is four days' sailing to/from Singapore and 4.5 days to/from Dubai, and by air it's three-and-a-half to four hours to either,' Shippers' Academy Colombo chief executive Rohan Masakorala was quoted as saying in a report by UK's The Loadstar.
Building on Colombo port's success in capturing transshipment traffic is a top priority. Last year, throughput at the port's three terminals rose to seven million TEU, of which 80 per cent comprised transshipment cargo.
Mr Masakorala said growth this year had contracted to five to six per cent from 10 per cent in previous years, owing to the slowdown in India and the world economy.
'The capacity, in terms of yard space and on the quay side, can go up to 10 million TEU across the three terminals,' he noted. 'But we only have three berths with deep enough draught to handle ultra-large container vessels of 18,000 TEU and above.'
Therefore, the development of East Container Terminal (ECT) at the port's deepsea south harbour is vital, said Mr Masakorala.
He said an agreement had been signed in May with India and Japan to operate the partially built 2.4 million TEU facility, which could commence operations 'within 12 months'.
Japan and India's involvement in ECT has been seen by some observers as a counter-balance to China's stake in Sri Lanka's Hambantota port with a 99-year lease in 2017.
'Partnering with a global maritime player like China was the most practical way to fulfil our plans for maritime development and connectivity. They have the skill and experience. The burden of the investment is gone now, we borrowed the money without a plan, so it was our own creation and we can't blame China.'
A major development under way at Hambantota is to increase bunkering services for ships plying the east-west trades, again via Chinese investment in tanker facilities and oil refineries.
'Sri Lanka is investing in oil refineries, so as energy becomes cheaper, we can offer cheaper bunkering which will attract more shipping opportunities in the region,' explained Mr Masakorala.
To complement the shipping services, Sri Lanka is pursuing regulatory reforms in the logistics sector, including customs processes and documentation.
Furthermore, Mr Masakorala said increasing multi-country consolidations was a major part of transforming Sri Lanka into a global maritime centre.
New free trade deals and free trade zones are helping foreign investors see the opportunity, he said, and major multinationals, such as GAC, DHL and Ceva, have all invested in larger operations in Sri Lanka in recent months.
Sea-air transport could also be a big opportunity for Sri Lanka, Mr Masakorala pointed out.
'It's already happening, because in Bangladesh some of the garment manufacturing comes to Colombo by air and then goes onto the deepsea trades. We just need to bring in more capacity and improve our marketing and our capabilities.'