Fifth Symposium(Presentaiton of Colombo: Sri Lanka Ports Authority)

1.0 Background

Sri Lanka is an island nation which is called the ‘’Pearl of the Indian Ocean’’. The Sigiriya Rock Fortress, a major tourist attraction is considered the Eighth Wonder in the world.

It has a land area of 65,610 square kilometers and is inhabited by 19 million people. Of this Sinhalese comprise 74% , indigenous Tamils 12.6% , Tamils of Indian Origin 5.5% and Moors 7.1%. While 69.3% are Buddhists, Hindus account for 15.5%, Muslims 7.6% and Christmas 7.5% . Over 75% of the population live in rural areas. The population is highly literate with a 90% literacy rate.

About 23% of Sri Lanka’s domestic output is derived from agriculture, forestry and fishery, 27% from Industry and over 50% from Services. Services have always accounted for a large proportion of Sri Lanka’s GDP owing to it’s import and export economy.

A new government was formed in Sri Lanka in December , 2001 and the most significant step forward, taken by it was to sign a MOU with the Liberation Tigers of Tamil Ealam(LTTE) on an indefinite ceasefire, in February 2002. Since, then the government, the LTTE and the Norwegian facilitators have been treading a very difficult but definite path towards achieving peace. The business community in Sri Lanka is optimistic of the possible outcome from peace negotiations and as a result economical activities in the country is in a state of rejuanation.

Peace and development in a country are complimentary, if peace prevails, at any given point of time. It is absolutely necessary that a country enjoying Peace has to give utmost priority towards Development and thereby achieve economic growth, resulting in further strengthening the prevailing Peace. The consolidation and strengthening of peace in a country through economic growth can only be achieved of a win-win policy is adopted. Therefore, the theme chosen for this year’s INAP symposium is quite appropriate and timely. We being in the Port Sector can make a gigantic contribution to a countries economy by the judicious choice of development needs based on a win-win policy.


2.0 Introduction
Being an island nation Sri Lanka has four commercial ports, namely Colombo, Galle, Trincomalee and Kankasanthurai, and form a base for transshipment activities due to their strategic location geographically. All these commercial ports are managed by the SLPA.

In achieving Sri Lanka’s national development objectives, port development plays a pivotal role, and therefore it is of vital importance to ensure (a )smooth flow of goods in and out of the country (b)provide a base for transshipment activities, (c)( increase entrepot trade and multi-country consolidation. Colombo, the principal port of Sri Lanka is located on the West Coast of the island, and has evolved from an open roadstead to a modern container port. Keeping abreast with the global trends on containerized cargo for shipping the Port of Colombo has already in operation two modern container terminals, the Jaye Container Terminal (JCT) managed by SLPA and the Queen Elizabeth Container Terminal (QCT) managed by a private sector consortium known as the SAGT. JCT, being THE PREMIER CONTAINER TERMINAL IN SOUTH ASIA, has 04 Container berths and 02 feeder berths with 14 Nos Quay Side Container Cranes(QSCC) and 39 Nos Rubber Tyred Gantry Cranes (RTG). Activities at JCT will be supplemented by the Unity Container Terminal (UCT) due to commerce operation around May 2004 with 03 QSCC’s and 08 RTG’s.

The country as a whole and the Port sector in particular suffered a major set back after the terrorist attack on the Katunayake international Air Port (KIA) in July 2001, with the introduction of the ‘ war risk surcharge’ on ships arriving at Sri Lanka ports. As a result several major shipping lines diverted their services from Colombo to neighbouring ports. Further the countries trade volume in terms of imports and exports dropped significantly after the September 11th terrorists attack in USA. As a result port activities dropped significantly. The signing of the indefinite ceasefire agreement in February 2002 gives much hope to the business community in Sri Lanka in general and to the shipping community in Sri Lanka and would over in particular.

The most significant event that took place in January 2002 from the SLPA point of view was the appointment of a new board of directors for the SLPA headed by a new Chairman. The new management team did not hesitate to take full advantage of the peaceful environment created by the ceasefire and took active and meaningfull steps to immediately enhance the productivity of the Ports thus enabling lost services to be brought back in 2002 and 2003. Further short term and long term development needs were identified for the Port of Colombo and action is being pursued for their implementation. Galle, Trincomalee, KKS, Oluvil and Hambantota have also been given due consideration and plans are afoot for tapping their development potential.

3.0 Productivity Enhancement Measures

The following measure were taken to enhance the productivity and increase the throughput at JCT. It was possible to successfully implement these measures due to the win-win policy adopted by the management.

(i) The system of ‘speed money’ given to operational staff by shipping lines were eliminated and an alternative productivity based Target Bonus System was introduced. As a result JCT was able achieve an unprecedent increase in productivity receiving many accolades from shipping lines.

(ii)In order to improve port productivity on a sustainable basis and to reduce operating overheads, SLPA introduced the long awaited voluntary retirement scheme(VRS) to reduce it’s redundant staff. 2993 employees retired from the SLPA. A second VRS is presently in progress and it is expected at least another 1500-2000 employees will be retired.

(iii) SLPA was able to attract seven new main line services in 2002. It entered into three Terminal Service Agreements (TSA) with Hanjin Shipping Lines, Zealand ( the largest Container Operator in the world and APL the fourth largest shipping lines). This was mainly possible due to much improve productivity levels shown by JCT staff and aggressive marketing policies adopted by the new management team of the SLPA. Many more TSA’s are planned to be signed in the near future as well.


4.0 Development of Port Facilities

In the aforementioned backdrop SLPA has examined her strategy for commercial ports, taking note of the characteristics of global shipping, hub port requirements for container transshipment activities and impact of port development on regional development within the country.

Sri Lanka’s march towards absolute peace as a result of the ceasefire agreement and the ongoing peace talks have given tremendous hope and a big boost to the development of the countries economy in terms of the Agriculture, Industry and Services. Recognizing the favourable geographic location of Sri Lanka and the consequent economic potential every effort is being made to reap the benefits that could be gained for the country by further development by further development the port services sector.

4.1 Short Term Development

SLPA has continuously upgraded facilities to meet shipping requirements, and following measures have been identified, as a result and some already completed.

(a)Deepening of the entrance channel to (-) 16m and deepening of two berths at JCT, to (-)15m in order to cater to super post panamax vessels.

(b)All six QSCC’s at the two deepened berths were upgraded to handle 18 boxes across the ship’s width.

(c) The RTG ‘s at JCT will be upgraded in order to handle 01 over 05 containers high from the present 01 over 03 and 01 over 04 high cranes thereby increasing, the yard capacity from 44120 slots to 48912. Action is underway to enhance capacity of 18 Nos RTG from 01 over 04 high to 01 over 05 high. Further 15 Nos RTG will be replaced with cranes of higher speeds to handle 01 over 05 high.

(d) Plans are also in place to increase the capacity of JCT to handle 4.5m TEU almost doubling the existing capacity.

(e) A new container handling facility ( the Unity Container Terminal , UCT) was created. It offers 390m of berth space at (-) 11m depth with a terminal area of 15.3 hectares. Handling facilities comprise of 03 QSCC and 08 RTG , and are dure to be installed by May 2004.


4.1 Long Term Development

■Colombo
The long term scenario is to cater for deeper draughs of 18m up to even 22m. Since the existing harbour in Colombo is unable to accommodate deeper draughts outer harbour development has been a necessity. Towards this end an agreement was signed with a consultancy company for detail engineering designs for outer Harbour Development works in May 2003. It is expected to be completed by May 2005.

■Galle
The development of Port of Galle is identified on a regional Port basis and will continue to handle cargo as done currently. It is also envisaged to shift general cargo from Colombo to Galle in order to improve on the container handling activities in Colombo.

■Trincomalee
The potential in Trincomalee is vast and requires careful land use planning. A master plan is being prepared to identify the harbour area for common user port activities.

■Oluvil
Development of a regional port in Oluvil has been undertaken with the assistance from the Government of Denmark. It will enable to develop a much neglected hinterland comprising three districts.

■Hambantota
The attraction at Hambantona is the enormous underutilized land and proximity to international shipping routes. The development of port facilities in Hambantota is presently under study to assess it’s feasibility. If feasible a Grand Master Plan for a massive development, to meet futuristic requirements is envisaged.

The SLPA is conscious of the immense responsibility entrusted on her towards the development of Port facilities for shipping and the massive economic benefits that could be reaped for the country.

SLPA will fulfill here role to both the Country and to international shipping by moving forward, judiciously planning development activities of Ports around the country.


5.0 Growth in Container Handling – Colombo (up to August 2003)

SLPA suffered a major setback in terms of domestic containers after the terrorist attack at KIA in 2001. Hence, a negative growth of 6.8% is reflected in 2001 for domestic containers. The situation became further aggravated in 2002 because of the continued surcharge on insurance of ships arriving at Colombo. As a result the number vessels arriving at Colombo reduced and SLPA took advantage of the opportunity created by reduced traffic, to carryout the deepening of two berths at JCT. The said berths were closed for dredging for about 02 months. A negative growth is reflected in both the domestic and transshipment containers in 2002.

However, with the productivity enhancement measures taken by SLPA and the signing of the ceasefire agreement improved the situation significantly in 2003, thus showing a marked growth up to August 2003 of 4.2%; 18.3% and 14.1% for domestic, transshipment and total containers handled respectively. It is also interesting to note that SLPA has done better than the private sector managed SAGT in transshipment container reflecting a growth of 18.3 % against 12.9% , by the latter( see annex).

6.0 Proposals for Co-operation between Sister-Ports

In order to make this event more productive and meaningful it is absolutely necessary to set up a mechanism that could lead to co-operation between sister-ports on matters of mutual interest.

At the outset it would be necessary to find out the strong factors( strenghs) each of the member ports, so that these strenghs could be utilized for the mutual benefit of each other. Exchange of training opportunities would also help to broaders the out look of it’s members. May the aforementioned ideas be taken up as proposals by the SLPA for enhancement of co-operation between the sister ports.

SLPA Web Site: http://www.slpa.lk/


Performance on Container Handling at JCT

SLPA has shown a significant growth in container handling in 2003 over2002. The overall growth up to August 2003 has been over 13% , while the growth in transshipment containers has been nearly 17%. The growth in domestic containers has been 5.6%. Much enhanced performance by the SLPA managed JCT is no a consequent and changed that took aforementioned in para….