Sri Lanka's SLPA Presents Cargo Management & Billing System NAVIS

26th February 2012, www.sundayobserver.lk, By Jayampathy Jayasinghe

SLPA presented the cargo management system and cargo billing system at the consultative discussion on "Ports Shipping Procedures and Industry Issues" organised by the Ports and Shipping Committee of the National Chamber of Commerce of Sri Lanka (NCCSL) recently.

The new computer system 'NAVIS' is a tested and proven computer software solution in many large ports in the world. Navis is empowering the SLPA to automate its identified operations such as as cargo billing.

Chief Manager Core Banking Systems of Bank of Ceylon, Lakshman Perera presented the automated payment system implemented by the BOC connected with Asycuda World and NAVIS systems at Customs and SLPA.

He explained the e-payment facility through internet and BOC branches.

It was well attended, and represented by over 60 leading establishments from the shipping and freight forwarding industry who raised queries related to Customs inquiries on EDI (Electronic Data Interchange), H.S code definitions, demurrage to be paid on delays and many clarifications with regard to SLPA operations.

Director General of Customs,Dr. Neville Gunawardene assured a better service to clients whilst sorting out all operational and technical issues. It was also noted that with the implementation of the latest computer system "Asycuda World", many operational issues would be ironed out.

Image: Chairman Ports and Shipping Committee of NCCSL Sujeiva Samaraweera (centre) Director General of Customs, Dr. Neville
Gunawardene (left) and Director General of Customs, S J S Gunathunga at the meeting.

Sri Lanka in P&O Cruise Itinerary. Arcadia Cruise Ship exclusively for Adults Calls on Colombo with 2,100 Tourists

02nd February 2012, www.island.lk

Officials from the Sri Lanka Tourism Promotion Bureau and Sri Lanka Ports Authority welcomed the vessel ‘Arcadia’ which called on Colombo yesterday (Feb. 02). The luxury carrier, owned by UK based company Carnival PLC, had more than 2,100 tourists from Britain, Australia, New Zealand and Brazil. Local excursion tour operator Gemini Tours and Travels was soon busy conducting tourists from the ship to prearranged destinations; Colombo, Kandy and Pinnawala. The vessel is scheduled to leave for Thailand, its next destination.

Related Info :

• Indian Cruise Ship from AMET Shipping Starts Calling at Colombo Port. Cruises Start from Rs 10,000 a Night

• Luxury Cruiser Nautica in Colombo with 628 Tourists

Sri Lanka Ports Authority to Invest Rs 1bn on Trinco Port City Development

02nd February 2012, www.dailynews.lk, By Indunil Hewage

Sri Lanka Ports Authority (SLPA) will invest approximately Rs one billion for infrastructure development of the Trincomalee Port City Development project in a bid to facilitate prospective investors who have expressed willingness to set up port related new ventures in the Trincomalee port .

SLPA will infuse money to develop roads and electricity facilities in the port area. It was recently disclosed that the government was ready to lease out land at the Trincomalee port to private investors and Cabinet approval has also been granted to this move. The Trincomalee Port City Development project which spreads across more than 500 acres of land will mainly consists of an Industrial Park and a Tourism Zone. However, the main focus of the authorities is to develop the industrial park at the initial stage.

Sri Lanka Ports Authority last month published the project proposal documents to private sector investors who are interested in setting up port related business ventures in the Trincomalee Port Industrial Park. At the moment, around 15 investors have purchased the required documents from SLPA. Interested investors will be able to collect the project proposal documents at the Port Committee Building situated in Fort until April 10, SLPA Planning and Development Chief Engineer Susantha Abesiriwardena told Daily News Business.

Each investor will be allocated five acre of land at the industrial park. However, investors are allowed to subdivide or amalgamate the land according to their preferences. The investors will have to comply with the requirements as requested in the project proposal document to get the SLPA approval to set up business ventures at the Trincomalee port vicinity, a SLPA senior official told the Daily News Business.

While the Oluvil duel purpose harbour being constructed, the Galle harbour too is undergoing transformation and is to be upgraded to a tourism harbour. Many tourism related investment opportunities would be open to investors.

Meanwhile the Hambantota Port project too has gained momentum with over one billion investments being found. Heyleys was the first company to invest in the Magampura Port by laying the foundation stone for a fertilizer processing plant.

In addition aviation sector investors too would have an opportunity to invest at the new Mattala Airport which is scheduled to be opened end of the year.

Related Info :

• Sri Lanka Invites Investments on Trinco Port. Large Tracts of Land in the Eastern Port to be Made Available by March

Sri Lanka's Aitken Spence Sells to China Merchants Holdings its 30pct Stake in Colombo South Container Terminal

23rd January 2012, www.reuters.com

Sri Lankan conglomerate Aitken Spence on Monday said it is selling its 30 percent stake in a $500 million port expansion joint venture to Hong Kong-based China Merchants Holdings.

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 =

113.9150 Sri Lanka rupees) (Reporting by Shihar Aneez; Editing by Bryson Hull)

Related Info :

• China Merchant Holdings & Sri Lanka Ports Authority to Buy Aitken Spence Share in Colombo South Container Terminal

China Merchant Holdings & Sri Lanka Ports Authority to Buy Aitken Spence Share in Colombo South Container Terminal

10th January 2012, www.lankabusinessonline.com

China Merchant Holdings (International), and state-run Sri Lanka Ports Authority may buy parts of a 30 percent stake in a container terminal project at Colombo port held by private listed Aitken Spence, a media report said.

China Merchants is already the dominant partner a 55 percent stake and the SLPA has a 15 percent stake.

Bloomberg newswires, a news service, citing an unidentified source said China Merchants is considering acquiring a part of Aitken Spence's stake and the SLPA may also up its stake.

Sources familiar with the deal said Aitken Spence was forced to pull out because a 350 million dollar loan from China Development Bank fell through at the last minute requiring additional funding from consortium partners.

CDB had asked for tight conditions including a Sri Lanka government guarantee, which was unavailable, the source said.

China Merchants had said it will pump in money for the 600 million dollar project, provided other partners did the same, which was difficult for Aitken Spence.

The construction contract of the port went to China Harbour Engineering Company, also a Chinese state run firm.

Aitken Spence stock closed up 115.00 rupees up 80 cents Wednesday.

Related Info :

• Colombo South Container Terminal. SLPA Signs PPP BOT Project with China Merchant International Holding, Aitken Spence Consortium

Sri Lanka's Port City Gets $700mn Investment. Land Reclaimed by Construction of Colombo's New Harbour to be Utilized

24th June 2011, www.lankabusinessonline.com

The Sri Lanka Ports Authority (SLPA) has secured a 700 million US dollar investment to build a 'port city' on land reclaimed on the capital's seafront with the construction of a new harbour.

SLPA chairman Priyath Wickrama said material dredged to build the new port next to the existing Colombo harbour will be used for the reclamation of about 200 hectares.

"We have got an investor who will invest 700 million US dollars for the landfill," he told a public forum, without naming the investor.

The land will be given on a 99-year lease and be used to build a 'port city' with port-related businesses along with other activities.

"The project will take 39 months to complete," Wickrama said. "It will have a mini-golf course, a Formula One race track, a small yacht marina and areas for water sports."

The land reclamation will be on the southern side of the new Colombo South Harbour, a deep-water port being built next to the existing port.

It is meant to cater to the latest generation, bigger container vessels which are too big to call at the existing Colombo port.

The dredging and breakwater of the new port was funded with a loan from the Asian Development Bank.

A consortium led by China Merchants Holdings which has partnered with the local Aitken Spence conglomerate is to build the new port's first container terminal at a cost of 500 million US dollars.

Related Info :

• Galle Face Expansion Project to Reclaim 400 Acres from Sea. A Perch to be Sold for Rs 10mn

• Experts Endorse Reclaiming of 500Acres from sea off Galle Face, Colombo, Sri Lanka for a Commercial City

• Colombo South Container Terminal. SLPA Signs PPP BOT Project with China Merchant International Holding, Aitken Spence Consortium

Colombo Port Cargo Volume up 10.1pct in Q1 2011

16th May 2011, www.island.lk

The Colombo port has seen an increase in volume for the first quarter of 2011, recording a volume of 1,076,540 containers during the first three months of this year, up 8.4 percent from 993,166 million a year earlier. Total cargo handled during this period amounted to 16.12 billion MT, up 10.1 percent from 14.65 billion MT a year earlier, latest data from the Central Bank showed.

The number of container vessels that called on Sri Lanka increased by 4.3 percent to 1,053 from 1,010 during the first quarter a year ago.

Domestic container volumes increased 8.3 percent during the quarter to 249,500 from 230,277 a year ago while transhipment volumes, mainly cargo to and from India, increased 8.9 percent 803,332 from 737,895 a year earlier.

There was 5.1 percent drop in re-stowing to 23,708 containers from 24,994 a year ago.

On a year-on-year basis, total cargo handled during the month of March 2011 increased by 9.5 percent to 5.73 billion MT with the number of containers increasing by 2.4 percent to 369,604 from 360,801 a year earlier. Ship traffic increased 8 percent in March 2011 to 376 from 348 a year earlier.

According to the Central Bank’s 2010 annual report, the cargo handling-ports and civil aviation sub-sector expanded substantially with a growth of 16.8 per cent in contrast to the marginal growth of 0.4 per cent registered in the previous year.

"This expansion was backed by the increase in both transshipment and cargo handling, which grew by 18.0 per cent and 26.7 per cent, respectively, during 2010. Further, the Colombo port handled the highest recorded volume of 4.1 million Twenty-Foot Equivalent Container Units (TEUs) during the year, it said.

Related Info :

• Colombo Port Containers Handling Grows by 11.78pct Year-on-Year. SLPA Handles a Record 205,539 TEU in January 2011

• Colombo Port Jaya Container Terminal Handles Two Million TEUs in 11 Months. Four Million TEU Mark to Reach before Year End

• Sri Lanka Port Profit Go Up in 2010

Sri Lanka Port Profit Go Up in 2010

21st April 2011, www.lankabusinessonline.com

Sri Lanka Ports Authority (SLPA), which runs the island's ports, increased revenue and operating profit in 2010 on the back of the global economic recovery which generated double-digit growth in cargo flows.

The SLPA's operating profit increased by 126 percent to 4.4 billion rupees in 2010 from the previous year while revenue rose by 21.2 percent to 28.3 billion rupees, according to the central bank.

The SLPA's operating expenditure increased by 11.7 percent to 23.9 billion rupees over the same period.

"The capital expenditure incurred by the SLPA during the year increased to 6.1 billion rupees compared to 3.8 billion rupees in 2009," the bank's annual report said.

"With the gradual recovery in international trade, the performance of port operations increased significantly in 2010."

Container cargo flows at Colombo port rose 19.4 percent to hit a new record of 4.1 million containers last year "supported by steadfast growth in both import-export and transhipment cargo," the bank said.

The number of containers handled in 2010 was also 10.8 percent higher than the total of 3.7 million TEUs (twenty-foot equivalent container units) handled in 2008, the highest-ever performance before the global recession.

Transhipment cargo handling increased by 18 percent in 2010 from the previous year, while the total cargo handled at the port of Colombo increased by 26.7 percent.

Related Info :

• Colombo Port Containers Handling Grows by 11.78pct Year-on-Year. SLPA Handles a Record 205,539 TEU in January 2011

• Sri Lanka Colombo Port to Double Bunker Storage to Supply Increasing Number of Ship Fuel Suppliers

• SLPA to Sell Land Reclaimed from Sea off Colombo Galle Face Green. Investors to be Identified for $350mn Cost of Reclaiming 340 Acres

Sri Lanka Colombo Port to Double Bunker Storage to Supply Increasing Number of Ship Fuel Suppliers

01st March 2011, www.lankabusinessonline.com

The Sri Lanka Ports Authority (SLPA) said it is more than doubling bunker storage facilities in Colombo port to cater to an increasing number of ship fuel suppliers.

Sales volumes have increased in recent months and the number of bunker supply license holders had increased to 11 from eight in 2008 when the market was liberalised.

The SLPA plans to more than double bunker fuel storage capacity to 95,000 metric tonnes with the aim of making Colombo a bunkering hub, a ports authority statement said.

Facilities to accommodate excess quantities of petroleum products based on the import plans will be arranged at weekly meetings.

A storage tank with a capacity of 5,200 MT is being built at a cost of 110 million rupees to enhance the present storage capacity of 29,500 MT.

A feasibility study is being conducted to identify the best location to construct another tank for the storage of marine diesel oil which will cost about 90 million rupees.

Obsolete oil pipelines are to be replaced at a cost of 150 million rupees to improve the efficiency in transfer of marine fuel from Colombo port to the Colombo Oil Bank bunkering facility.

The SLPA also plans to provide for additional berthing for oil tankers.

Colombo Oil Bank employees have also been given a 15 percent pay rise.

Related Info :

• Colombo Port Bunkering Facilities Expanded

• Sri Lanka to Open Bunker Terminal at Hambantota Port. $130mn Facility Offers Capacity of 82,000 Metric Tonnes

• New Indian Port No Threat to Sri Lanka

SLPA to Sell Land Reclaimed from Sea off Colombo Galle Face Green. Investors to be Identified for $350mn Cost of Reclaiming 340 Acres

12th February 2011, www.island.lk

Sri Lanka Ports Authority plans to reclaim and sell to private investors 340 acres of land off the capital Colombo where a new port is being built next to the existing one, an official said.

The cost of reclaiming the sea off Colombo’s Galle Face Green promenade, which will come under SLPA jurisdiction, has been estimated at around 350 million US dollars, its managing director Nihal Keppetipola said.

"We’re going to fill up and sell the land," he told reporters during a site visit at the new Colombo south harbour project which will expand the port’s container handling capacity.

"To find the money, we will identify interested investors and take an advance."

He said an entirely new city will be built on the area reclaimed from the sea which will be properly planned and extend the limits of the present city which is congested.

"It will be for residential purposes, and offices and shopping along with eco-parks," Keppetipola said.

Related Info :
• Galle Face Expansion Project to Reclaim 400 Acres from Sea. A Perch to be Sold for Rs 10mn

• Experts Endorse Reclaiming of 500Acres from sea off Galle Face, Colombo, Sri Lanka for a Commercial City

Colombo Port Containers Handling Grows by 11.78pct Year-on-Year. SLPA Handles a Record 205,539 TEU in January 2011

09th February 2011, www.island.lk

The Port of Colombo saw volumes increased by 11.78 percent year-on-year in January 2011 while the Sri Lanka Ports Authority (SLPA) handled its highest ever monthly container throughput in January 2011 at 205,539 TEU (twenty-foot equivalent units), which was 4,327 TEUs higher than the previous record of 201,212 TEUs in August 2010.

The 205,539 TEUs handled by SLPA in January 2011 was against 165,400 TEUs handled in January 2010, which is 40,139 TEUs more, or a 24.2 percent growth.

The total containers handled by the Port of Colombo for the month of January 2011 reached 366,971 TEUs compared with 328,290 TEUs handled for the same period in 2010, which is 38,681TEUs more handled this year, a growth of 11.78%.

"In the year 2004, the Port of Colombo handled 2 million TEU of containers which has grown to 4 million TEU by 2010. It is expected to be 10 million TEU by 2020, when the port will generate 40 percent of the government income. Last year, the state-run JCT of SLPA reached a historic record throughput of 2 million TEUs in eleven months," the SLPA said in a statement yesterday (9).

SLPA Managing Director Capt. Nihal Keppetipola said performance at the Port of Colombo was erratic or mediocre during early years, when ad-hoc and inconsistent policies were being implemented with no coherent vision, and that led to the Port of Colombo being relegated to a lower ranking in the global container market.

"However, from 2007, the JCT management had the vision to focus and bring back the Port of Colombo to its current status as a major regional hub-port. It is with a sense of great pleasure and pride, that I place on record the fact that the world’s second largest shipping line MSC which had abandoned the Port of Colombo during that period in favor of other competing hub ports, is now back with us once again," Capt. Nihal Keppetipola said.

Dr. P.B.Wickrama is the Chairman of SLPA.

Related Info :
• Colombo Port Jaya Container Terminal Handles Two Million TEUs in 11 Months. Four Million TEU Mark to Reach before Year End

SLPA New Cargo Village in Peliyagoda Targets 6mn TEU's by 2012

07th January 2011, www.dailymirror.lk, By Supun Dias

SLPA Chairman Priyath Bandu Wickrama said that a new Cargo Village will be set up in Peliyagoda to meet the target of 6 million TEU's by 2012. Sri Lanka currently has capacity to handle 4.5 million TEU's.

He said this delivering the annual P. B. Karandwela Memorial Lecture, organized by the Chartered Institute of Logistics & Transport Sri Lanka.

"Port, Health, Banks and Customs will come under one roof when the project is completed. The land area in approximately 27 acres and other primary goal is to provide our customers an efficient and a smooth service as required", he said.

"In the future we will remove all the warehouses situated within the Port of Colombo to the newly set up Cargo Village. A rail link from the Colombo Port will be constructed and before attracting local and foreign investors the necessary infrastructure will be set up at the village", he added.

He further revealed that SLPA also requested the Indian Government to take steps to draw Indian businessmen to invest in the Cargo Village".

"An e- Commerce and an online payment scheme for customers will also be set up in the village to provide an accurate service and also to draw more investment to the Colombo Port as well as the Cargo Village in Peliyagoda", he noted.

New dockyard in Magampura

SLPA is also in the final stages of preparing a Request for Proposal (RFP) to call for tenders to build a large dockyard in the Magampura port, Dr. Wickrama said.

Presently the country operates its only dockyard in the Colombo Port, the Colombo Dockyard which established its operations in 1974 and is now Sri Lanka's largest engineering facility in the business of ship repair, shipbuilding, heavy engineering and offshore engineering.

Besides being located in a convenient geographical location, it also has the benefits of a deep water harbour which provides and ensures quicker turn around times at affordable rates for larger ships.

Colombo Dockyard operates four graving dry-docks, the largest with a capacity of 125,000 metric tons DeadWeight (DWT) as well as extensive repair berth facilities and is also accredited with the ISO 9000-2000 Quality Certification.

Colombo Dockyard PLC has also shown its interest in investing at the Magampura Port development project, Dr.Wickrama said.

Colombo Port Jaya Container Terminal Handles Two Million TEUs in 11 Months. Four Million TEU Mark to Reach before Year End

07th December 2010, www.dailynews.lk

Sri Lanka Ports Authority (SLPA) run Jaya Container Terminal [JCT] has recorded a throughput volume of two million; twenty foot equivalent units (TEUs) in a little over eleven months this year. Total TEU handling of two million recorded an increase of 26.5 percent compared to last year.

The SLPA recorded an increase of 7.6 percent compared to the total figure of 1.9 million TEUs, the highest-ever performance rate recorded by SLPA in 2008 before recession hit global trade, Sri Lanka Ports Authority Managing Director Capt Nihal Keppetipola said.

He said this performance was achieved for the first time in its history as a State-run terminal. “SLPA has been performing its above average efficiencies through the past years and has displayed an impressive growth trend. The Colombo Port would also reach the four million TEU mark before the end of the year, which will also be a record.

“Phase One of the Colombo South Harbour which gives an additional 2.4 million TEU capacity will be ready by early 2013 ensuring Sri Lanka the South Asian Container Hub status,” Keppetipola said.

The breakup of this two million TEUs handled by SLPA, includes a 37 percent increase of local import and export TEUs and a 21 percent boost of transshipment TEUs.

The SLPA is in a better position as a state-run terminal compared to the privately-owned South Asia Gateway Terminals (SAGT), which possesses a 16 percent volume increase in the period under review, he said.

The SLPA has attracted about eleven new shipping services to the JCT in the recent past and the mega liners such as APL and MSC are now patronizing SLPA.

The highest-ever monthly volume of 201,217 TEUs was achieved in August with an increase of 22 percent compared to the corresponding year. Meanwhile, the Port of Colombo (including SAGT), handled 360,973 TEUs in August marking a 10 percent improvement.

Images: Two millionth container for 2010 being discharged from vessel APL Sharjah at Jaya Container Terminal, Colombo Port; and Highways Ministry Secretary Sujatha Kure waving the flag, signaling to discharge the two millionth container with the SLPA Chairman Dr Priyath B Wickrama, SLPA Managing Director Capt Nihal Keppetipola and other SLPA officials.

Related Info:
Volumes Up at Colombo Port Private Terminal, SAGT Run by John Keells

Sri Lanka New Colombo South Port Terminal Eyes Indian Cargo for 2.4mn TEU Capacity

Colombo South Container Terminal. SLPA Signs PPP BOT Project with China Merchant International Holding, Aitken Spence Consortium

18th September 2010, www.dailynews.lk, By Charumini De Sila

Sri Lanka Ports Authority (SLPA) signed a letter of intent (LOI) with the China Merchant International Holding and Aitken Spence Consortium to construct the Colombo South container terminal yesterday.

The terminal will be constructed on a Build Operate and Transfer (BOT) basis and will be developed on a public-private partnership.

The total investment of the project is US $ 450 million. The project will be completed before 2012 for operations, a senior Sri Lanka Ports Authority official told Daily News Business.

With the opening of the Colombo South container terminal, the SLPA will have the capacity to handle another 2.4 million Total Equivalent Units (TEUs). The Colombo port handles over four million TEUs monthly now.

The official said the Colombo East and the West container terminals are also under construction and with the completion of those two terminals by 2020, the Authority expects to handle 10 million TEUs monthly.

The terminals will be developed with modern technology such as computerized terminal management systems. The use of latest technology will help to increase the throughput, vessel turnaround, productivity and the revenues of the Colombo port.

The on-going Colombo harbour expansion infrastructure projects will be completed within the scheduled time frame of April next year. Of the main 5.1 Kilometre breakwater, 3.1 Kilometres has finished work.

“Expansion of the Colombo harbour will be a boost to the Sri Lanka’s shipping industry”.

It will also facilitate the private sector investment in the country. It is one of the most important projects to uplift the facilities of the Colombo port. It is now under way and making a commendable progress, he said.

The project will promote economic growth by improving Sri Lanka’s competitiveness in the ports sector by expanding Colombo port using public-private partnerships and facilitate economic growth by enhancing national competitiveness in international trade via lower transport costs and faster delivery times, the official said.

Related Info:
1st Terminal of Colombo South Harbour with China Merchant Holding to Go Ahead. Adds 2.4mn TEU Capacity to Sri Lankan Port

Sri Lanka Hambatota Port Draws Dubai & Singapore Service Providers

13th September 2010, www.lankabusinessonline.com

Service providers in the trade hubs of Dubai and Singapore have shown interest in a new port in southern Sri Lanka where a request for proposals from businesses has been issued, an official said.

The Sri Lanka Ports Authority said it has issued a request for proposals from international and local firms or consortia to design, build, finance, manage and operate business ventures at the new port of Hambantota.

The deadline for proposals is September 30, 2010.

"Now we are getting a lot of requests from service providers in Singapore and Dubai," SLPA chairman Priyath Wickrama said.

"From Hambantota they can easily feed both the east and west coast of the Indian sub-continent."

Cargo flows are increasing from India whose economy is growing fast. Transhipment cargo from the Indian sub-continent is sent either through Colombo, Singapore or Dubai.

Both Singapore and Dubai have used their geographical location on the main East-West shipping route to emerge as trade and cargo hubs.

The SLPA has said it is keen to use the position of the new port at Hambantota, only a few miles from the main East-West shipping route across the Indian Ocean, to make it a hub for the south Asian region.

The SLPA began filling the new port's basin in mid-August with the first ship expected to berth by year's end.

A team of local and foreign entrepreneurs who obtained the Request For Proposals were recently taken for a visit to the new port.

Under the phase two of the project investment and business ventures will be available for cement grinding, storage and bagging, fertilizer storage and bagging, LP gas distribution, ware housing, vehicle assembly, flour milling, and food processing and packaging.

Wickrama said the SLPA is also developing a marketing plan for the terminals in Colombo and Hambantota.

"We are going to market Sri Lanka, not only terminals," he said. "We have a product to market now. Earlier we had concepts to market but now we have a product."

He said port capacity is being built up to attract cargo volumes as existing capacity at both government and the private terminal in Colombo port is nearing their maximum.

"To attract volumes to Sri Lanka we must have capacity; otherwise we might not attract regional volumes on a large scale."

Related Info:
Sri Lanka Hambantota Port Invites Investments of $1.5bn, Largest Single Investment Option for Foreign Investors

Sri Lanka's Hambantota Harbour 1st Phase Completes with Filling of Water by President Mahinda Rajapakse

1st Terminal of Colombo South Harbour with China Merchant Holding to Go Ahead. Adds 2.4mn TEU Capacity to Sri Lankan Port

08th August 2010, www.nation.lk

The last remaining hurdle standing in the way of clinching the 35-year Build Operate Transfer (BOT) deal to construct the 2.4 million TEU capacity first terminal of the new Colombo South Harbour, was more or less ironed out on Thursday, when Attorney General (AG) Mohan Pieris proposed a compromise solution to the lead bidder’s request for a Government guarantee to get the loan capital from banks.

At Thursday’s meeting, a senior representative of the lead bidder, China Merchant Holding (CMH) had been present with their lawyer.

Shipping sources said the terminal, originally estimated to cost US$ 450 million, would be funded by 30% equity and 70% loan, and the consortium had wanted a guarantee from the Government to facilitate the loan component. Since such a guarantee was not in the Tender documents, and no such guarantee was given to the other privately managed terminal in the Colombo Port, the South Asia Gateway Terminal, which too is on BOT basis, the Government is now not in a position to change the terms of theoriginal Tender documents.

The AG has however, proposed some other method to comfort the banks into funding the terminal.

Sri Lanka Ports Authority (SLPA) Chairman Dr Priyath Bandu Wickrema said last night that, with this final hurdle out of the way, they were confident of issuing the Letter of Intent to the CMH-led consortium in the coming days, to get their act together here on the ground, and hoped to sign the BOT contract with the consortium within six months, for the work proper to begin.

Already, Korean contractor Hyundai, who has undertaken the construction of the 6,000-metre breakwater for the new harbour, funded by a US$ 300 million loan from the Asian Development Bank, has completed a 2,000-metre stretch for the building of the first terminal.

The consortium that bid for the first terminal of the South Harbour is led by CMH with a 55% stake, Aitken Spence 30% and SLPA 15%.

The Colombo Port being the hub port for the sub continent, is assured enough and more container traffic, with India’s annual container traffic alone now projected to grow to 21 million TEUs in five years, from 9.1 million TEUs registered in 2008.

Related Info:
Colombo South Harbour Development Project

Colombo Dockyard Attracts European Ship Repairs. Cardiff Marine Inc Tanker Delos Calls in for Collision Repairs

29th March 2010, www.dailynews.lk

Cardiff Marine Inc. Greece owned Motor Tanker Delos called in with collision damages to her shipside as the tanker suffered damage while at Chittagong anchorage. The owners had decided to place the vessel in Colombo for permanent repairs.

Colombo's strategic location and the reputation as a reliable service provider attracted the Cardiff Marine Inc., to utilize Colombo Dockyard facilities for this damage repairs. Cardiff Marine Inc., is a well reputed ship owner/Manager managing a fleet of vessels in excess of six million deadweight. The peaceful conditions prevailing in the country has resulted in major European fleet owners looking at Colombo for their repair requirements, generating much needed foreign revenue for the country.

The tanker Delos initially planned to arrive in Colombo in February finally arrived in Colombo on February 17. Due to her shifted arrival, the initially allocated yard slot was not available as the next planned tanker had already arrived at the repair berth. The only available option was to secure another suitable berth to accommodate the vessel and immediate action was taken to request assistance from the local agents GAC Shipping Ltd. The local agents secured a suitable berth for this massive tanker (LOA 183.00 Meters/Beam 32.00 Meters).

The Shipyard mobilized the repair team under the project leadership of Ship Manager Dhammika Dissanayake, with coordinated support from steel department Steel engineer Avantha Gunathilake and his team to complete the job efficiently. As the job was carried out at the port berth, all required services had to be arranged with meticulous planning and coordination.

Sri Lanka Ports Authority to Sign South Colombo Harbour Container Terminal in April with China Merchant Holdings & Aitken Spence

15th March 2010, www.island.lk, By Devan Daniel

A top official says the deal between the Sri Lanka Ports Authority (SLPA) and China Merchant Holdings, and its local partner Aitken Spence Holdings, to design, build and operate a container terminal in the South Colombo Harbour would be finalised before May this year.

Hong Kong port operator China Merchant Holdings and Aitken Spence were the sole bidders to build, design and operate a container terminal on the Southern side of the port of Colombo after the initial bidding process was nullified by the state, and negotiations with the SLPA have dragged-on for almost a year.

At one stage, the top officials of the SLPA said the authority was considering other options to develop the container terminal without China Merchant Holdings. One option that was considered was as a private-public partnership through a share issue.

Last Friday, SLPA Managing Director Capt. Nihal Keppetipola told the Island Financial Review that negotiations were ongoing between Merchant China Holdings (and Aitken Spence Holdings) and the SLPA.

"We expect a breakthrough in negotiations within a week’s time after which the SLPA would refer the agreement to the Attorney General’s Department. If all goes well and we receive a favourable report from the Attorney General, the contract should be awarded to China Merchant Holdings and their local agents Aitken Spence sometime in April," Capt. Keppetipola said.

The delay in reaching consensus was caused by the financial bid presented by China Merchant Holdings and Aitken Spence.

Sources close to the bid on the SLPA side said Aitken Spence-China Merchant Holdings had offered about 50 percent less in its bid compared to what they had offered at the first round of bids. At the first round of bids several local and international companies had bid for the project and it was awarded. But one of the bidders disputed the deal and the government was compelled to nullify the entire process.

"Considering the global financial crisis and the slump in the global shipping industry, they have offered much less in their bid the second time around; almost 50 percent less than what they proposed earlier," a source said.

Meanwhile, sources said the SLPA had made changes of its own from the original round of bids, increasing, for example, the minimum guaranteed volume.

"In the previous round, SLPA had set this volume at two million TEUs per annum after 30 years with 1.5 million at the initial stages. This time, the minimum guaranteed volume has been set at 2.4 million TEUs per annum after 20 years, with two million TEUs after 10 years," a source said. The minimum guaranteed volume is a royalty payment that would be paid to the SLPA irrespective of whether or not the volume is met.