15th May 2011, www.thebottomline.lk
The Hub Port status is not under threat despite numerous port development projects taking place in the region. The vision for the Colombo port has become a reality through the Colombo South Terminal and it is the only port in the region that can accommodate ultra large carriers of 18,000 teus coming on stream in 2013, says Dr. Parakrama Dissanayake, Chairman of Aitken Spence Maritime Ltd. and former Chairman of the Sri Lanka Ports Authority.
The question that is being frequently posed is whether the Colombo port’s position as the gateway to the Indian Sub Continent market is under threat, says Dr. Parakrama who points out that the question is being raised particularly with the launch of
Vallarpadam port in Cochin, India, where Indian Prime Minister Manmohan Singh himself opened the port facility.
The Vallarpadam port, managed by
Dubai Ports International and in the First Phase, it will have a quay length of 600 metres with a design capacity of handling one million teus (twenty-foot equivalent units) per annum.
The project was formally launched with the laying of the foundation stone by Prime Minister Manmohan Singh. The ceremony was attended by Thomas Jacob, Chairman, The Kochi Port Trust (KoPT); Sultan Ahmed Bin Sulayem, Executive Chairman Dubai Ports; Minister of Shipping T. R. Baalu; Chief Minister for Kerala, Oommen Chandy and Governor of Kerala R. L. Bhatia.
Construction is expected to be completed in four years and commercial operations to begin within a year of completion.
Colombo, already the gateway For this question that comes up all the time, Dr. Parakrama’s answer is that Colombo has already emerged as the gateway to the Indian sub continent. He is of the view that Sri Lanka should graduate from the concept of a hub and the country should have the vision of emerging as a logistical hub, not only for South East Asia but also for the Middle East.
“Why I say Middle East is that we see that the shipping lines plying between Asia and Middle East and when large vessels ply from Asia to the Middle East, we are talking in terms of a deviation. So we need to try and attract those vessels to try and discharge containers in Colombo and feeder these containers into the Middle East. That way the shipping lines can save a huge cost by not deploying large vessels.”
He also observed that as the bunker costs were already high, shipping lines would prefer to deploy smaller vessels to carry those cargoes.
Right draft“Having said that, we have the right draft and the right capacity to handle ultra large container vessels coming on stream. We need to be mindful of the recent developments. The Maersk Line has already ordered ten vessels with the capacity of 18,000 teus each. These are the largest vessels ever built and they are called Triple-E Class vessels with a draft of 16 metres handling 23 containers across,” said the Aitken Spence Maritime chief who is also the Chairman of Ace Cargo Ltd. and Director, Aitken Spence Plc.
The government of Sri Lanka had obviously geared itself to handle those large vessels by way of the Colombo South Terminal,” pointed out Dr. Parakrama and noted that the construction of the
Colombo South Terminal would start soon. Already, the party that had secured the contract, the consortium comprising the Aitken Spence and China Merchant Holdings, had commenced the soil investigation.
2.6m TEUs per annum “This new terminal will be able to accommodate ultra large container vessels such as the Maersk Triple-E Class vessels, and this would be the only terminal in this region that will be able to handle this type of large vessels. The ultra large vessels will come on stream in 2013 and the Colombo South Terminal will also be completed by that time to accommodate those huge carriers,” observed Dr. Parakrama.
“The terminal will have a depth of 18 metres and we can go to about 21 metres. In a way one could say that we have had the vision and we have been able to convert that vision into reality through the Colombo South Terminal,” he said.
The construction of the breakwater is in progress and the construction of the Colombo South Terminal will begin soon. The length of this terminal is 1,200 metres, with the capability of handling 2.6 million TEUs per annum.
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Earlier this month, Spence pulled out of the joint venture with the state-run Sri Lanka Ports Authority (SLPA) and China Merchants Holdings due to high costs and unreasonable demands, officials have said.
Aitken Spence in a statement to the Colombo Stock Exchange said Sri Lanka's Board of Investment and the SLPA had approved the sale to China Merchant. The company did not disclose how much it was to be paid.
China Merchant upon completion of the transaction will own 85 percent of China International Container Terminal, the joint venture operating company set up to build the Colombo south terminal. SLPA will continue to hold 15 percent. ($1 = 
