Could you give us some background information on your Ministry in terms of its main responsibilities and what has been the development of the Ports Sector in the last couples of years?
This Ministry deals with the Ports of Sri Lanka, which is a very important area in the economy of Sri Lanka, largely due to the geographical location of Sri Lanka. The Ministry also deals with the economic and social development of the South of Sri Lanka, which is a very large area of the country. I will deal with the Ports first:
The Ports of Sri Lanka are in a sense the nerve centre of the economy of Sri Lanka. It is through these Ports that all the imports and the exports of Sri Lanka either come or go, to and from Sri Lanka. Therefore, the Ports of Sri Lanka have been important from ancient times. In the old days, we had the Port of Galle, which is in the South of the country. This Port was the centre of international trade in the Indian Ocean from earliest times. History records show there was trade with Sri Lanka as far back as King Solomon's times. The Bible tells how the Kings took gems and ivory, precious stones and spices from Sri Lanka. Galle was the centre of international trade in the Middle Ages. The Chinese brought all their exports to Galle and traded with the Arabs who took what the Chinese brought from Galle to the Middle East and Europe. Then there was the period of Western imperialist conquerors, first the Portuguese, then the Dutch and then the British. They captured the Port of Galle and they did all their trading with this country through Galle, mainly in that time with spices, such as cinnamon, pepper and also precious stones, ivory and timber.
The Port of Colombo commenced operations only around 1890 when the British commenced the building of the Port of Colombo. Today, Colombo is the main Port of the country. It is very strategically located as it is in the centre of the Indian Ocean, almost equidistant from the Gulf and the Red Sea and the Middle East on one side and the Straits of Malacca and Singapore on the other side. It is also on the main route from Europe to Australia and from Europe to South East Asia and Japan. It is situated at the tip of the vast Indian subcontinent with a population of more than one billion people and immense possibilities for expansion of trade, both imports and exports. Therefore, Sri Lanka and particularly the Port of Colombo, is very strategically located and has been a very important Port in the Indian Ocean for the last one hundred years. We are, however, not prepared to rest on our reputation or on our very advantageous location because we cannot develop on reputation alone. Therefore, we have elaborate plans for the expansion and development of the Port of Colombo and all our other Ports including Galle, Trincomalee and a new Port, called Hambantota, which is in the South and even closer to the main shipping route than Colombo.
The Port of Colombo has become a very important container transhipment Port. The figures in the last three years are: 1.714.000 in 1998 (container handling throughput in TEUs); 1.704.000 in 1999 and 1.732.000 in 2000. The ship arrivals in the Port of Colombo in the last three years: 1998: 3879; 1999: 3968 and in 2000: 3832.
Our immediate proposals for the expansion and development of the Port of Colombo include the following:
We are taking immediate action to deepen the entrance channel to the Port of Colombo and to also deepen the basin of the Port to be able to take the larger container vessels that are now coming into the market. We have two main areas in the Port of Colombo. One is the Queen Elizabeth Quay, so called because the Queen herself opened it about 50 years ago. The other is called the Jaya Container Terminal. It is almost twice as big as the Queen Elizabeth quay. At the moment, the Queen Elizabeth quay is being developed in a Joint Venture with P&O -a joint venture in which the private sector has about 52%, the International Finance Corporation, which is an affiliate of the World Bank and the Common Wealth Development Corporation in London also have roughly 30% jointly and the Sri Lanka Ports Authority has 15%. It will be privately operated and managed. Work is now in progress and the first new terminal will be in operation by June. This is one section of the development of the Port of Colombo.
On the other side is the Jaya Container Terminal, and what we call the North pier. We are developing that through the Sri Lanka Ports Authority itself without any private sector Joint Venture. This work should be ready in about a year's time. The two main sections of the present harbour are being developed and expanded in order to take in more tonnage and also to take in bigger ships which are coming on stream now.
We are also taking steps to computerize operations in the Port and to improve Information Technology in the Port and to bring in state of the art technology into Port operations. In addition to this, we have a new project, called the South Port of Colombo, which will be South of the present Port. We have just got a complete Feasibility Report by a team of consultants, one American, one Australian, one Dutch and one German. After this Feasibility Study, we have now to embark on detailed engineering designs, bills of quantities, find the necessary finance, and then we hope to start work on it by January 2003. That is our timetable to start working on the new South Port of Colombo. That will double the present capacity of the Port of Colombo. It will have 12 berths and it will have a new breakwater. It will entail a complete dredging and filling up of areas, terminals and quays and so on. It will have 12 new berths and we hope to start construction of the new berths, in January 2003 but we will do it in stages. We do not propose to build all 12 berths at once. It will be in stages of two berths at a time to meet the rising demand. Because our projection is that two berths at a time every two years will meet the rising demand of ships calling at Colombo. The total project starting in 2003 should be over by 2010, and all 12 berths should be functional by 2010. The breakwater and dredging we hope will be done by the Government because private sector firms are not willing to undertake capital works of this nature but the berths we hope to do with the private sector on a BOOT or BOT basis whatever the private sector prefers at that time. We will call Worldwide tenders for the 12 berths as time goes on. So when the South Port of Colombo is completed the capacity of the present Port will be doubled.
Galle is still functioning though it is not the main Port of Sri Lanka anymore. We are building one new alongside berth at the moment in Galle. We have just got a Feasibility Study by the Japanese for the further development of what we call the outer harbour of Galle. It entails the construction of a new breakwater and a few more new berths. We hope to make Galle a regional Port to take on the excess traffic from Colombo and also to cater to the exports and imports of the Southern area of Sri Lanka.
| Our third main Port is Trincomalee on the East coast. It is probably the finest natural Port in the Indian Ocean. It was a Portuguese naval base, then a Dutch naval base and finally a British naval base. It was the most important British naval base for 150 years from 1800 till independence in 1948. It is such a fine natural harbour with tremendous depth that in the last Great War of 1939 to 1945, when the British wanted to hide its biggest ship at that time, the Queen Mary, they had no place to hide it anywhere in Europe, so they brought it all the way to Trincomalee and kept it there, so that neither the Germans nor the Japanese could find it or see it. That shows what a fine natural harbour it is. It was also famous in history. There were two great British war heroes who were instrumental in defeating Napoleon. One was Admiral Lord Nelson on the sea and a man called General Willington on the Land. Both of them were stationed at Trincomalee for some time and that shows how important Trincomalee was to the British defence system then.
At the moment our navy still uses it, but largely due to this war which is taking place in this country, its development has been retarded. But even with the war on, we are at the moment building one alongside berth, which is done by a Japanese firm. When the war ends, which we hope will be soon, we hope to further develop Trincomalee, both as an industrial Port and as a Port for tourism, because the Trincomalee area is very good for tourism on the one hand and for industry on the other. So it will be one of our main industrial and tourist areas in the future when peace returns.
We are also thinking of developing the Port of Hambantota in the extreme South along with the development of the Southern region, which is part of my Ministry. It is a harbour, which has tremendous depth, much more than Colombo and it is much closer to the main sea routes, because it is at the Southern tip of the island. Our plan is to; when shipping and trade is developing some more, start the development of the Port of Hambantota, both as an industrial Port and a Port for international shipping. We are commissioning a complete Feasibility Report this year. We think that since it is a completely new Port, it will take at least 2 years for this feasibility Report to be completed. After that we hope to do the detailed engineering designs, the environmental study and then seek funds for the development of that Port. So it may be possible to start construction of the Hambantota Port by about 2005-2006 depending on the volume of shipping that is there at that time.
Roughly, these are the main development plans for the Ports of Sri Lanka. We have two minor Ports in the North of the country, one at a place called Point Pedro and another at a place called Kankesanturai. These are both local Ports which serve the North of the country. We hope to develop them for local traffic that is to send food and fertilizer, medicine, and other things as well as to bring cement and other things which are produced in o the North to the South once the war is over.
Then, much more important is the structural and organizational and other reforms in the management of our Ports, which we contemplate for the future. We have to make our Ports much more efficient than they are today, because competition is becoming very great in the Indian Ocean. For example, there are three new Ports coming up in the Middle East and Gulf area. Salalah in Oman, Aden in Yemen and Dubai. On the other side Malaysia is developing two new Ports. And of course there is always Singapore, which is probably the biggest and most efficient Port in the entire Indian Ocean. India is also taking steps for developing its Ports. Mumbai, Chennai, Tuticorin and Navashiva. So in the face of competition, we want to improve the efficiency and bring in a lot of reforms in the administration of our Ports.
We have already brought in private sector management in the Queen Elizabeth quay. On the other side, the Jaya Container Terminal, we have certain plans for corporatisation. In other words, the Jaya Container Terminal will continue to be administered by the Sri Lanka Ports Authority but it will work purely on commercial lines like the Port of Singapore Authority. We hope to bring in these reforms in the administration of the Port of Colombo in the course of this year. We are also taking steps to do a better job in selling our Ports because not enough has been done to sell the Port of Colombo and our other Ports in foreign countries and in the shipping centres of the world. So we hope to start a large publicity drive to sell the services offered by the Port of Colombo. The Ports will continue to be a very important section of the economy of Sri Lanka, because the Ports bring a great deal of revenue for the government.
We are largely an import -export economy, we depend on exports and for this we need a very efficient Port. How far the concept of the South Asian Free Trade area has gone I do not know but obviously if the South Asian free trade area really gets going, then the Trade of this area should increase and Colombo because of its geographical situation, can act as a hub for most of the transhipment of this area.
As you mentioned earlier, you hope to bring the private sector more into the Port Management and of course it is also the policy of the Government to attract more foreign investors. As our readers are top management people in the whole world, what would be your final message to them?
We hope to make Colombo one of the most efficient Ports in the Indian Ocean and also in the whole world. We need the full support and cooperation of the private sector in this work.
We hope that in the future too the private sector will play an important role in the development of the South Port of Colombo and in the general development of the Ports of Sri Lanka. The private sector is entering more and more into the management of Ports in the world and Sri Lanka cannot go against this trend, whether we like it or not.
NOTE: World Investment News Ltd cannot be made responsible for the content of unedited transcriptions.
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