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BRI-Backing Sees Sri Lanka Bid to Become Leading Global Maritime Hub

Following huge investment via China's Belt and Road Initiative, the country unveils ambitious port development plans.

Photo: The Port of Colombo: From domestic necessity to international asset. (Shutterstock.com)
The Port of Colombo: From domestic necessity to international asset.
Photo: The Port of Colombo: From domestic necessity to international asset. (Shutterstock.com)
The Port of Colombo: From domestic necessity to international asset.

Late last month, the Sri Lankan government confirmed it had given the go-ahead to a massive national programme of port modernisation in line with its long-term objective of establishing the country as one of the world's preeminent maritime hubs. This new initiative comes on top of the hefty Chinese investment, funnelled via the Belt and Road Initiative (BRI), that has helped transform Sri Lanka's marine cargo-handling resources from being primarily domestic necessities to becoming world-class resources.

News of this latest move began to filter out in January this year when the Sri Lanka Ports Authority unveiled its National Policy for the Maritime and Logistics Sectors, which outlined the country's broader ambitions in detail for the first time. At the heart of this new policy was a commitment to reinvent the country's regional transshipment hubs as global maritime interchanges in order to counter the increased competition coming from a number of the region's newer ports as well as from many of their more traditionally aggressive global counterparts.

Expanding upon the plans at the end of last month, Sirimevan Ranasinghe, Secretary to the Ministry of Ports and Shipping and Western Development, said: "Of the country's six primary ports, three – Colombo, Hambantota and Trincomalee – have been designated as our international shipping and logistics development priorities."

To date, while the redevelopment of the Hambantota Port has been hamstrung by funding concerns, the refitted Port of Colombo became an almost instant commercial success. This is partly down to the fact that, back in 2015, its BRI-backed South Terminal – developed thanks to US$500 million investment from Hong Kong-listed China Merchants Holdings International (CMHI) – was the country's first deep-water terminal.

With its traffic increasing progressively, in the first half of 2018 its container handling throughput rose 15.6%, the highest figure for any of the world's ports. In the past year as a whole, it processed a record seven million TEUs. It's a figure that dwarfs the global growth in container handling, which expanded just 3.6% in 2018, before being reduced to a 0.5% trickle in the first quarter of this year.

In order to enable growth to be sustained, the redevelopment of the Port of Colombo's East Container Terminal (ECT) is already underway, with plans for a similar refurbishment of both West Container Terminals 1 and 2. Once completed, the total capacity will have been expanded to 35 million TEUs.

Even the current congestion at the Port of Colombo has been taken as a good sign by many, with the expectation that its workload can be redistributed among those facilities where demand is currently lower. The nearby Hambantota International Port, for one, has already put in its bid to take on the excess capacity while the new terminals are under construction.

Addressing the forward possibilities, Tissa Wickramasinghe, Chief Operating Officer at the Hambantota International Port Group – the Sri Lanka Ports Authority / CMHI joint venture vehicle – said: "We are currently evaluating our options with regard to upgrading our container-handling capacity. Thankfully, our geographical position sees us also able to facilitate an array of ancillary functions, including port services, maritime services and integrated logistics.

"Similarly, in the case of the Trincomalee port, as well its utilisation for coastal shipping purposes, it's also set to take a lead when it comes to servicing routes to India, Bangladesh, Myanmar, Thailand, Indonesia and Malaysia. Galle, meanwhile, will continue to handle conventional cargo, while Kankesanthurai will be redeveloped with substantial investment from India, which is earmarked for the construction of two additional cargo-handling berths".

Geoff de Freitas, Special Correspondent, Colombo

Content provided by Picture: HKTDC Research
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