The increase in cargo flows from India generated by accelerating economic growth will ensure business for a new container terminal that Sri Lan
ka's Aitken Spence is investing in, an official said."Colombo will continue to be south Asia's maritime hub," said Parakrama Dissanayake, chairman of Aitken Spence Maritime, the conglomerate's shipping business unit.
"If not Aitken Spence will not invest in the Colombo South Terminal," he told a conference organised by the Chartered Institute of Logistics and Transport.
The 500 million US dollar deep-water South Terminal in Colombo port will have a quay length of 1,200 metres, four berths and 12 cranes with an annual capacity of 2.4 million TEUs.
It will be built and operated on a
35-yar lease by a joint venture consisting of China Merchant Holdings with a 55 percent stake, Aitken Spence with 30 percent and the state-run Sri Lanka ports Authority with 15 percent."The investment is huge," said Dissanayake. "It is the single largest foreign direct investment ever to take place in Sri Lanka."
He warned that the amount of Indian cargo transhipped through Colombo port was dropping while its existing terminals were not deep enough to handle the bigger new ships being ordered by shipping lines.
About 70 percent of the containers handled by Colombo is transhipment cargo from India.
East-bound cargo from Europe is mainly transhipped at the ports of Dubai and Salalah in Oman.
But the volume of west-bound cargo, traditionally transhipped in Colombo, is decreasing because the port's market or clients, previously Indian ports from where cargo originated, are becoming competitors.
Shipping lines were making more direct calls at ports in India which is modernising its own ports and building new ones to cater to booming trade volumes.
"Shipping lines are going direct to India, not transhipping containers," Dissanayake said. "So the competition has shifted.
Competition from regional ports mainly from India is a huge challenge we need to overcome."
Colombo port's new South Terminal will be able to cater to the bigger new vessels now being deployed on trade routes, And Indian government policy of developing a network or "necklace" of ports under its Sagar Mala policy could be complemented by Colombo's own development of deep-water terminals, Dissanayake said.
India, with a population of over a billion people, generates only 8.1 million TEUs (twenty-foot equivalent container units) compared with China's 100 million TEUs in 2008.
"India's economic growth in 2018 is expected to surpass China's," Dissanayake said. "When the economy grows they will handle more volumes."
Related Info:
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