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

Colombo Port already the Gateway to the Indian Sub Continent. Hub Port Status Secured by the Capacity to Handle Ultra Large Container Vessels

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.

Related Info :

• New Indian Port No Threat to Sri Lanka

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

• Dr Parakrama Dissanayake to Address Terminal Operators Conference in China, the Largest Global Annual Event in Ports Industry

• Sri Lanka's Game Changing Next Port of Call. Standard Chartered Highlights Ports Development in Sri Lanka Driving Economic Growth & Boosting Revenue

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's Game Changing Next Port of Call. Standard Chartered Highlights Ports Development in Sri Lanka Driving Economic Growth & Boosting Revenue

13th May 2011, www.island.lk

Global banking giant Standard Chartered Bank says the Sri Lankan government’s push to develop the country’s ports is likely to be a game changer; increasing trade, driving economic growth and significantly boosting revenues. However, fiscal constraints are a major dampener to Sri Lanka’s prospects given the inadequate and inefficient capacity of the existing ports.

Sri Lanka must act quickly, because major port developments in South India pose a threat to the island-nation’s ambitions of being a maritime hub delivering greater economic dividends to its people.

Standard Chartered Bank Research Economist Samantha Amerasinghe in a paper titled ‘Sri Lanka: The Next Port of Call’ in the bank’s latest periodical ‘Global Research: On the Ground’, says the development of Sri Lanka’s ports would have a strong multiplier effect on direct and indirect employment generation.

"The current push to develop ports is likely to be a game-changer, allowing Sri Lanka to benefit from increased trade. The expansions of Colombo Port and Hambantota (Magampura) Port, which is set to be the largest port in South Asia, are expected to drive economic activity and significantly boost revenues in the years ahead.

"However, a strategic location alone is not sufficient to achieve the status of a regional trade and logistics hub. The South Asia region is becoming highly competitive, and addressing capacity constraints and modernising port operations through new technology are crucial," the research paper said.

The existing port capacity is inefficient and inadequate, reflecting the broader structural problems the country has had to deal with which has constrained economic growth by hindering trade. Over the years, governments have not engaged in large infrastructure development projects, but with the end of the thirty year conflict, the research paper says the tide has turned.

"In a bid to improve the country’s competitiveness and attract investment, the government has identified ports infrastructure as a critical area for development," it said. But there are concerns.

"From a fiscal perspective, we are concerned about the government’s ability to spend on ports and aviation to achieve hub status (approximately 17 percent of total capital expenditure is earmarked for ports development, second only to the 34 percent allocated for highways expenditure), given other priorities such as education, health and rural infrastructure.

"That said, the economic benefits of ports development far outweigh such concerns, as large-scale projects of this nature have strong multiplier effects on direct and indirect employment generation. Furthermore, the development of ancillary industries such as oil bunkering will have indirect economic benefits. Colombo, Galle and Trincomalee ports employed 12,828 people in 2010; the development of Hambantota port alone is expected to create 50,000 jobs."

Benefits of developing Sri Lanka’s ports

The Standard Chartered Bank research paper says revenue from Sri Lanka’s ports, once completed and fully operational, would triple revenue from current levels to Rs. 72 billion.

Lower freight rates and faster delivery would result in savings amounting to US$ 82 million by 2015. (The average turnaround time in Hong Kong is 10 hours, whereas it is 18 to 24 hours in Sri Lanka.)

Direct payments from transshipment alone are expected to increase the contribution of ports to GDP by an additional 0.1 percent.

FDIs, which amounted to US$ 460 million in 2010, would amount to US$ 800 million in the ports sector alone.

South Indian port development a threat, Lanka could lose US$ 52mn

* High prices, labour unrest short-term respite for Sri Lanka

The Standard Chartered Bank research paper says the development of ports in South India pose a threat to Sri Lanka’s ambitions of becoming a regional maritime hub.

"Although Sri Lanka is strategically positioned on the east-west maritime route, its ports sector faces stiff competition from regional counterparts. India’s port development activities and changing sea routes pose a threat to Sri Lanka’s ambition of establishing itself as a shipping hub.

Sri Lanka’s ports are currently also a partial gateway to the southern and eastern parts of the Indian peninsula, providing trans-shipment services for the import and export trade of the southern Indian states of Tamil Nadu, Karnataka, Hyderabad, Kerala and Kolkata.

Sri Lanka must keep a close watch on current developments in the ports sector in the region, where port infrastructure is rapidly being enhanced, while ensuring that investments do not result in under-utilisation of resources and assets. Major shipping lines call at Colombo Port primarily to trans-ship volumes of containers to India’s Southern ports," the report says.

Sri Lanka currently commands an 18 percent share of India’s transshipments (70 percent of total container volume handled by Sri Lanka) and has nothing to fear as India’s pricing is three times higher.

"If (Indian port) prices are lowered, this has the potential to threaten 80 percent of the transshipments handled by Sri Lanka, which are worth US$ 52 million. Labour unrest in Indian ports may provide some respite for Sri Lankan competitors, but if the island-nation is to compete with regional players, it needs to act fast to modernise its ports and overcome operational shortcomings.

Sri Lanka to Develop Northern Kankesanturai Port with Indian Aid

05th May 2011, www.lankabusinessonline.com

Sri Lanka is to develop the northern Kankesanturai port with Indian aid in a project that will deepen the harbour basin and build a breakwater, a government spokesman said.

The Cabinet of ministers of approved a proposal by President Mahinda Rajapaksa as minister of ports to "rehabilitate" the Kankesanturai port in the northern Jaffna peninsula with Indian aid.

Sri Lanka is to enter into a memorandum of understanding with the Indian government on the project.

"Development of Kankesanturai is considered as one of the important projects in the context of the security of the country and the economic and social development of the northern peninsula," a government statement said.

Infrastructure in the Jaffna peninsula was neglected or damaged during the island's 30-year ethnic war which ended in May 2009.

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 FDI Goes up by $1bn on Hotel & Port Deals

24th March 2011, www.lankabusinessonline.com

Sri Lanka's foreign direct investments will pick up with planned projects in ports and hotels valued at 500 million dollars each, finance ministry secretary P B Jayasundera said.

He said a concession agreement has been signed in the Colombo port for a new terminal that will need 500 million US dollars to build.

"That is a 500 million dollar private foreign investment. A private foreign investment," he told a business forum in Colombo, organized by Sri Lanka's software and services companies (SLASSCOM).

"People ask 'Where is the investment?' That is the investment."

The terminal will be built by China Merchant Holdings, a Chinese state firm, and Colombo listed Aitken Spence group.

Jayasundera said investments at the port alone will be equal to the annual foreign investments realized a year between 1990 to 2010.

Sri Lanka has still not published a foreign direct investment figure for 2010 but it is expected to be around 300 to 400 million US dollars, lower than the 600 million dollars achieved a year earlier.

The state investment promotion agency is expecting about billion dollars in FDI in 2011.

"In addition new FDI is coming to the hotel sector, particularly to the city hotels, and each investment is in the rank of 500 million dollars. Investment in land alone is 125 million dollars up-front cash payment."

Hong Kong based Shangri La is being given a block of land in Colombo's Galle Face beachfront earlier used by the military.

The land is already being cleared and readied to be given over to the developer who is expected to build a hotel, shopping complex and apartments.

Another block of land is to be sold to CATIC, a Chinese state military hardware maker, who is expected to tap an international chain to manage the hotel it will build.

"We are no longer giving land without a fee or a nominal fee," Jayasudera said. "The World Trade Centre or the past investments that have happened in Sri Lanka, land has been given free. That is the effort probably made at that time to get the investment.

The World Trade Centre is a reference to a twin tower commercial property projects by Singapore based developer SP Tao in Colombo during the war.

"Today FDI is coming with upfront payment for the land whether it is in the form of a lease or whether it is in the form of outright sale."

"So that is the premium the country has gained during the last several months."

A 30-year war ended in 2009 and the post-conflict country is rapidly returning to normal, Jayasundera said. He said in the north refugees have been resettled and mines cleared.

He said security barriers were removed even in Colombo and transaction costs in the economy were down. Meanwhile the administration was also going on a massive infrastructure building drive.

Related Info :

• Chinese Company to Build Another Luxury Hotel and Shopping Complex in Colombo, Sri Lanka

• Shangri La Will Position Sri Lanka as a Prime Tourist Destination – Greg Dogan, Shangri La President & CEO

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

Dr Parakrama Dissanayake to Address Terminal Operators Conference in China, the Largest Global Annual Event in Ports Industry

13th March 2011, 2011, www.island.lk

Dr. Parakrama Dissanayake – Chairman, Aitken Spence Maritime and Director, Aitken Spence PLC, has been invited to address the prestigious Terminal Operators Conference (TOC Asia), the largest global annual event in the Ports Industry, which will be held in Tianjin, China from the 15th to 17th March 2011.

Dr. Dissanayake who is a member of the expert Advisory Group of Terminal Operators Conference (UK) will present a paper on "South Asia – East Asia Trades and Prospects for Terminal Development".

Amongst those who would speak at this Conference are; Alex Chu, Deputy Chairman of Dah Chong Hong Holdings, Cai Hin – Vice Chairman of China Federation of Logistics & Purchasing, Wei-duen Lee – Senior Consultant of GHK Hong Kong Ltd., Ms. Pamela Tung, Director –Transatlantic Trades OOCL, Lai Ah Chek, Head of Ports & Logistics –China, Richard Klien, President –Latin Ports.

Dr. Dissanayake who has served on the UN/UNCTAD Panel as an expert on Ports and Shipping has in the past held the positions of Chairman – Sri Lanka Ports Authority, Chairman – Jaye Container Terminals, Chairman – Chartered Institute of Logistics and Transport, Chairman – Institute of Chartered Shipbrokers – Sri Lanka Branch.








He is also the past Chairman of Central Advisory Board of the Sri Lanka Transport Board and co-Chairman of the Transport Cluster of the National Council for Economic Development.

He is a member of the Faculty Industry Consultative Board – Department of Transport & Logistics Management of the University of Moratuwa.

National Insurance Trust Fund Finds Business Opportunities in New Ventures at Hambantota Magampura Port

11th February 2011, www.dailynews.lk, By Indunil Hewage

New business ventures to be set up in the Magampura port premises will bring more business opportunities to the National Insurance Trust Fund (NITF).

A leading company in the world has sought Sri Lankan Government approval to set up a vehicle assembling plant in Hambantota.

At the moment the company has forwarded required documentation for land allocation in the Magampura port premises. The company is planning to export utility jeeps to South Asian countries after assembling the vehicles in the Hambantota, National Insurance Trust Fund Chairman Senaka D Abeygoonasekera told Daily News Business.

He said these ventures will bring more business opportunities to NITF with regard to insurance needs of the company.

The world is looking at Sri Lanka with a lot of hope and Sri Lanka will be on par or better than Singapore by 2020. Enough resources and a knowledgeable population who can adopt to the changing technologies and latest trends in the economy in a speedy manner would assist in achieving set targets in the country’s economy.

Many investors are eyeing Sri Lanka and the Magampura port will also be a vital transit point in the shipping and air cargo facilities generating more foreign exchange to the country, he added.

In addition, National Insurance Trust Fund has made an investment worth of Rs 1.2 billion in 2010 with the Urban Development Authority to support the Colombo Restructuring plan. The investment was made under the guarantee of Bank of Ceylon at the UDA debenture issue.

“Idle lands and old buildings in the Colombo city will be used in the Colombo restructuring project by eliminating the ugliness they bring to the city.

There are so many unauthorized buildings in the city and under the project these structures will be removed while giving unauthorized dwellers alternative accommodation,” he said.

The project will help mitigate the floods and rain water drainage system issues in the Colombo city with the removal of unauthorized buildings which have been put up in an uncontrollable manner,” Abeygoonasekera said.

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

Sri Lanka Opens Bids for Industries by 25 Parties at Hambantota Magampura Port Next Week

26th January 2011, www.lankabusinessonline.com

Sri Lanka's ports authority will open financial proposals by 25 parties to start industries at a Chinese built port in the island's south next week, chairman Priyath Bandu Wickrema said.

He said a government committee had completed preliminary scrutiny of 25 proposals for suitablility and financial bids for the projects will be opened next week.

Wickrema has said that firms wanting to process cement, iron ore, fertilizer, sugar and vehicle assembly had given proposals.

Sri Lanka's 'Magampura' port in the Southern Hambantota town is a 360 million US dollar Chinese-built project.

It will be used for ship refueling and also as an industrial port. There are about 100 acres available to industries inside the spacious port, an official said.

Related Info :
• Sri Lanka President Commissions Hambantota Magampura Port. 2nd Phase of Construction Begins
• Sri Lanka to Open Bunker Terminal at Hambantota Port. $130mn Facility Offers Capacity of 82,000 Metric Tonnes
• Sri Lanka Hambantota Magampura Port Attracts Vehicle Assembly and Cement Manufacture

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

08th January 2011, www.dailynews.lk

Sri Lanka plans to open a $ 130 million fuel bunkering terminal with a capacity of 82,000 metric tonnes at its new Hambantota port in May, the island nation’s Ports Authority said on Friday.

Hambantota, which opened in November, is set to be Sri Lanka’s biggest port once completed and give the Indian Ocean country access to traffic on one of the world’s biggest East-West shipping lanes, located a few kilometres off its southern coast.

“We will start bunkering in May,” Sri Lanka Ports Authority, Chairman Priyath Wickrama, told Reuters.

“Our target is to reach 4 million tonnes storage, with bulk transhipments.” China Exim Bank has loaned $ 77 million toward the cost of the terminal, which the Ports Authority will operate. China has loaned Sri Lanka the bulk of the money to build the $ 1.5 billion port.

The Ports Authority has said China would have no operational role in the bunker terminal, the only part of the port not open to external investment.

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

07th January 2011, www.lankabusinessonline.com

The Sri Lanka Ports Authority (SLPA) plans to invite investors to make proposals for investments in the eastern port of Trincomalee where large tracts of land are available by March, its chairman Priyath Wickrama said.

"We're developing Trincomalee and plan to issue a request for proposals to develop land," Wickrama said, delivering the annual P B Karandwala Memorial Lecture. "We plan to issue the RFP by March."

The lecture was organized by the Chartered Institute of Logistics & Transport Sri Lanka to honour a key figure in ports and shipping in the island.

Wickrama said 9,000 acres of land are available in Trincomalee and that previous RFPs had not drawn the desired response because of the ethnic war.

The 30-year war ended in May 2009 resulting in an economic boom which growth projected at 8.5 percent this year after eight percent growth in 2011.

"Now the situation has changed and there is a lot of potential for investments," Wickrama said.

Trincomalee will be developed more as a leisure port and no more industries will be allowed.

The port has a cement plant and flour mill.

"In the future we will not allow polluting industries as Trincomalee is a very sensitive area. It is one location where you can see elephants and whales - where the two giants on land and in the sea can be seen in one location."

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.

FPS Lanka for Operations at Southern Port of Hambantota and Eastern Trincomalee Harbour to Handle Post-war Reconstruction Cargo

29th December 2010, www.lankabusinessonline.com

Sri Lankan logistics firm FPS Lanka is considering setting up offices in the new southern port of Hambantota and in eastern Trincomalee harbour to handle an anticipated influx of cargo flows for post-war reconstruction.

It expects new logistics contracts to be awarded in the first quarter of 2011 as projects get finalised, FPS Lanka managing director Gihan Nanayakkara told LBO in an interview.

The firm is a joint venture between Bertling Logistics India and Famous Pacific Shipping which got together to offer logistics services, especially given the expected increase in cargo flows for post-war reconstruction and growth.

Sri Lanka's 30-year ethnic war ended in May 2009 resulting in an economic boom, with growth forecast to hit eight percent this year, along with a sharp increase in tourists. Nanayakkara said the joint venture is the first time the parent firms are collaborating and the partnership could be extended to other locations if necessary.

Sri Lanka embarked on huge infrastructure projects even before the war ended, with several highways, railways, power plants and high-rise buildings being built along with an airport and port in Hambantota and another port in Colombo.

Hambantota port was opened only a month ago and lies close to the main maritime trade route.

Nanayakkara said Bertling its own fleet of ships, including heavy lift ships, and can provide the specialised heavy lift skills needed for post-war Sri Lanka where such skills are in short supply.

Nanayakkara said the joint venture has access to skilled personnel and equipment in south Indian ports and can take only a few days to mobilise.

The company is also considering business opportunities in the Maldives where a tourism revival means more resorts are being built.

"Every island resort has its own harbour basin which means dredging, a pier, and transport of almost all supplies by air or sea," said Nanayakkara.

In Sri Lanka, while some major projects are under construction many more are in the pipeline with logistics contracts to ship the supplies required expected to be awarded in the first quarter of 2011.

One project the FPS Lanka joint venture supplied was the 300MW power plant in Kerawalapitiya, on the north-west coast.

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.

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Lanka IOC to Expand Bunkering Business to Hambantota Magampura Port

12th November 2010, www.dailymirror.lk, By Sunimalee Dias

The company aims at growing with more activities taking place in Sri Lanka, LIOC Managing Director (MD) Suresh Kumar said yesterday. He noted that these changes would be carried out internally in a bid to improve its efficiency as part of an ongoing process.

Kumar observed that should the Government permit it, LIOC would also expand bunkering in Hambantota as well. The Government is expected "to take a view at the appropriate time" in relation to allowing bunkering operations to get underway.

The LIOC MD observed that they believed Hambantota would prove to be of immense value to its operations.

LIOC lost Rs.422 million in the year to March 2010 down from Rs.1, 237 million a year earlier but had boosted bunkering sales to 15 per cent of its total revenues.
The company's sales of bunkers or ship fuel had risen to 149 million litres from just 21 million litres a year earlier.

Revenue from bunkers had grown to Rs.7.7 billion (15.3% of total) from Rs.977 million a year earlier as total revenue rose 5.4% to Rs.50.2 billion.

LIOC is an overseas venture of Indian Oil Corporation Ltd. and is listed in the Colombo Stock Exchange.

Sri Lanka Hambantota Magampura Port Attracts Vehicle Assembly and Cement Manufacture

22nd October 2010, www.lankabusinessonline.com

A new port being built in Sri Lanka's southern Hambantota has drawn investment proposals from local and foreign businesses including the local Senok Combine and Micro Car for vehicle assembly, officials said.

Madras Cements, India's fifth largest cement maker and part of Chennai-based Ramco Group, has also proposed investing in a cement terminal at the port, a greenfield site to be operated as a free port with no taxes.

A Sri Lanka Ports Authority statement said that 27 local and foreign companies among 63 that collected the request for investment proposals have submitted bids.

"The response shows investors are keen to invest in the new port," said Agil Hewageegana, SLPA chief engineer in charge of the port project in Hambantota known as Magampura Port.

He said some of the local firms that sent proposals are in joint ventures with foreign partners.

The new deep water harbour close to the main shipping route across the Indian Ocean, to function initially as an industrial port, was built by Chinese firms and largely funded by Chinese loans.

The SLPA received six investment proposals for cement terminals in Hambanthota when bids closed last week, two for vehicle assembly, two each for liquid petroleum gas and petro-chemical complexes, and three for warehousing.

Investors have also bid to set up a sugar refinery and a fertilizer plant.

The two local firms interested in vehicle assembly are Senok Trade Combine, agents for vehicle manufacturers like Audi, Subaru and Skoda, Transmec Engineering, which assembles the 'Micro Car' in Sri Lanka.

Pakistan's Jamshoro, based in Lahore, which had bid for part of the Shell Gas assets in that country has submitted a proposal for an LPG terminal.

Proposals petro-chemicals investments have come from a Singapore firm and Advance Surfactants Lanka, which makes industrial chemicals.

The SLPA said a total land area of 2,000 hectares belonging to the Magampura Port will be available for local and international entrepreneurs.

"Magampura Port is being developed as a multi-purpose, industrial and service port and aims to make the best of the expanding markets of the Indian sub-continent, with short transit times to India, Africa and the Gulf region," it said.

The government plans to start phase two of the project during the last quarter of this year with the contract agreement recently signed between China Harbour Engineering Company and SLPA.

The financial assistance would be extended by the the People's Republic of China on a concessionary basis, the statement said.

The second phase will expand and deepen the harbour, adding more berths and cranes to handle containers.

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

14th October 2010, www.lankabusinessonline.com

The increase in cargo flows from India generated by accelerating economic growth will ensure business for a new container terminal that Sri Lanka'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."

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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.

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