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Sri Lanka shipping industry mystified over unopened Hambantota port proposals

Mar 20, 2017 11:32 AM GMT+0530 | 0 Comment(s)

ECONOMYNEXT – Proposals to make investments at Hambantota port in southern Sri Lanka, which critics have dubbed a ‘white elephant’ for not having enough business, have remained unopened despite being received last year, an industry official said.

Rohaan Abeywickrama, former chairman of the Chartered Institute of Logistics and Transport, said the port’s only business is vehicle transshipment, which was not enough to repay loans taken from China to build the harbor.

An attempt by the Sri Lanka Ports Authority to do bunkering or ship fuel sales at Hambantota ended in big losses, he told a forum discussing the port’s future held by the Ceylon Chamber of Commerce and Shippers’ Academy Colombo.

“Hambantota made massive losses in the bunkering business,” Abeywickrama said. “In the first place, the SLPA should not have undertaken bunkering, which is not their core business. The SLPA lost heavily.”

Abeywickrema said total losses at Hambantota port since 2013 added up to Rs15.6 billion.

“The SLPA needs only Rs10 billion to complete the balance construction of the East Container Terminal (in Colombo port),” he said. “We also could have bought SriLankan Airlines (the loss-making national carrier) an Airbus A321 with that money. That shows the magnitude of the loss.”

 Abeywickrema said repeated attempts to attract investments to Hambantota, which the new government has proposed giving to China on long lease in a debt-for-equity deal, had failed.

“The SLPA and government institutions called requests for proposals three times in past and failed to generate worthwhile interest,” he said.

The first time in 2010 drew 27 proposals, 10 in 2012 and another 10 in 2016, of which four were for bunkering.

“Strangely, the 2016 proposals have not been opened yet. They are kept sealed. I don’t know why.”

Despite talks by officials and politicians of the former government of cement factories and sugar refineries, none have “seen the light of day,” Abeywickrema said.

The reasons could be because of lack of infrastructure, the high cost of utilities in the remote dry zone region, the lack of a hinterland to generate business and non-availability of supporting services, he said.
(COLOMBO, March 20, 2017)


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